GRTU mitigation plan

The government's proposed utility tariffs will cost each person €1,014 a year and the Chamber of Small and Medium Enterprises - GRTU deems the government to have adopted a "haphazard approach" in recovering costs.

The GRTU yesterday published a mitigation plan ahead of the social partners' meeting today to discuss the government's proposed utility tariffs, which have caused uproar since their announcement.

GRTU director general Vince Farrugia said the proposed tariffs were "socially unjust", especially because there was no crisis and there was no need for "dramatic" moves because it was "a manageable situation".

Delving into the mitigation plan, he said this included short-, medium- and long-term measures with, among others, a nationwide awareness campaign on energy conservation.

The GRTU studied the government's proposals in detail and believed the estimate of €365 million, which the government was planning to collect to cover Enemalta's and Water Services Corporation's costs, was exaggerated. This could be drastically reduced to about €210 million.

Mr Farrugia said consumers were already paying a fee, plus the 95 per cent surcharge, as well as excise duty on the fuel they purchased for transportation purposes.

From the excise duty on fuel alone, the government was raising €104.5 million and the GRTU was proposing that part of these funds should be used to keep the tariffs low.

The mitigation plan includes rewards and penalties for consumers based on their energy consumption and a ban on the importation of incandescent light bulbs from the beginning of next year (the EU intends introducing this ban in 2010).

The plan includes rebates of 70 per cent on solar water heaters and photovoltaic systems and residences built after 2009 would have to instal solar water heaters.

For domestic use, the GRTU proposed two tariffs: a guaranteed price option for a 12-month period, which allows consumers to plan their costs for a whole year, and a multi-tier option to include peak-hour use, intermediate and off-peak metering. In addition, the GRTU's plan includes the introduction of energy audits for all households and converting street lighting and traffic lights to solar power.

The GRTU suggested monitoring the water and electricity consumption of households and the industry through audits and the introduction of benchmarks, based on 2005 rates, before the surcharge was introduced and before the fuel crisis.

Mr Farrugia said an energy audit of an average household would cost about €60.

On the capping mechanism for industry and the hospitality sector, Mr Farrugia said this was discriminatory and was not the solution to their needs.

Instead, the GRTU proposed a formal audit of all industries and a government subsidy via funding received from excise duty on imported fuels. This, he insisted, would not infringe EU regulations.

Mr Farrugia insisted that a basic tariff should apply but the surcharge mechanism should be kept and fluctuate according to the price of oil.

The GRTU proposed a power-conservation programme, where-by consumers would be given different and reduced consumption allocations based on 2005 consumption levels.

Hotels, tourist resorts and shopping centres would be given an allocation 20 per cent below their 2005 consumption level.

Commercial buildings and offices having more than 1,000 square metres of floor space, including government ministries and departments, would be given a 15 per cent reduction in their energy allowance.

Residential and industrial consumers would have their allocation cut by 10 per cent of their consumption in 2005.

Mr Farrugia said consumers who use more than their allocation would be penalised while domestic consumers who did not exceed it would have their surcharge cut by 10 per cent.

With regard to water, Mr Farrugia argued that the distribution costs had risen "alarmingly" over the last two years, with no explanation given.

In this regard, the GRTU proposed a two-tier billing system: one standard tariff for a year's use, payable in advance; and another for all other users but with a discount for early electronic payments.