Thursday, 30th October 2008
Derogation effectively safeguards Enemalta's electricity monopoly
Enemalta Corporation can continue to be the only provider of electricity for the coming years after the government secured a derogation from a set of new EU rules aimed at opening Europe's power market to competition.
The derogation, which indirectly safeguards Enemalta's monopoly, was discussed informally between the European Commission and the government over the past months and has now been given the green light by EU energy ministers.
The derogation grants Malta, as an emerging market, the right not to allow third parties into its internal electricity market. In addition, state-owned Enemalta can continue producing and distributing electricity.
A Commission spokesman said Brussels accepted Malta's arguments that the island cannot have more than one supplier and distributor given its small size. The same applies to Cyprus and Luxembourg.
The derogation means that, in the future, no one can use Enemalta's grid to supply electricity to Maltese consumers or compete with the corporation through lower tariffs.
"First of all, this option is only a theory as it is economically unfeasible due to our economies of scale," a government spokesman said when questioned about the issue.
"It is clear we can't have more power stations on the island. Also, the project to link Malta to the European electricity grid is an Enemalta project.
These things require hundreds of millions of euro in investment, which no one can do apart from Enemalta," the spokesman added.
Through the new rules, consumers on mainland Europe will be experiencing more competition in the coming years. In Europe, it is already possible for a consumer to switch the electricity supplier and competition is becoming fiercer.
The rules, known as the Third Energy Package, aim at opening up the energy sector to competition by limiting the dominance of energy suppliers.
The rules, which still have to be approved by the European Parliament, will prohibit energy monopolies to simultaneously continue to produce and distribute energy. Companies will also have to divest their interests from the running of their electricity distribution systems.
Major distribution companies will also be obliged to allow third parties to use their grids for electricity transmission purposes in order to offer consumers more choice.
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Comments
This only means an increase in the tariffs because of other companies are involved in the distribution they have to make a profit over and above that made by EneMalta.
The Prime Minister on Xarabank said "Ta l-1 t`Ottubru mhux vera xejn. M`hemm xejn deciz li jidhlu b`lura... ahna qed niddiskutu" .. Dr. Austin decided that tariffs ARE BACK DATED.
Dr Austin: "Even if oil is now at $100, it still costs less than we bought it. We bought at $85. If it goes below that, we will keep our usual word and decrease the prices".... Oil is at less than $70 ... Dr. Wistin increased the prices !!
Dr. Austin: "all monopolies must end for the benefit of the consumer": The government negotiates a derogation to protect the Enemalta electricity monopoly.
And yet the apologists and spin doctors still meniton the change of positions taken by Dr. Sant and the MLP years ago! The TWO PRIME MINISTERS DO IT EVERYDAY !!! Even the person in command changes everyday !!!
Keep playing the piano dear apologists- while the ship is sinking!
This means we are under the incompetent, inefficient rule of EneMalta with no freedom of choice like our fellow citizens on the mainland. We are at the whims of whatever Austin Gatt imposes on us - hence why there will be no more discussions as we are stuck with this monopoly.
Why did we join the EU? Why is this administration arrogantly treating us like little children as if we are still a colony dictated by an uncaring foreign power distant from the people?
Had the government put this to referendum it would have found a landslide against this move. Government of Malta open your eyes and ears - you are not listening to the moans and groans of your people and will pay dearly election time.