New tariffs may compensate consumers

The new water and electricity tariffs are expected to compensate consumers with lower bills if it is found they had been overcharged due to the lower price of oil, according to an explanation of how the new tariffs are being worked out.

A Malta Resources Authority spokesman said the present tariffs, announced in December, took into account the projected expenditure of Enemalta Corporation for the six months starting from October 2008, and the revenue needed to cover this expenditure. This resulted in the tariffs announced then.

The new tariffs will take into consideration the extra revenue or loss Enemalta had in those six months compared with the projected revenue for the same period. It will also consider the projected revenue needed by the corporation for the next six months and work out the tariffs accordingly.

If the workings show that because of the drop in price of oil, Enemalta earned extra revenue from the new tariffs, this will be deducted from the next tariffs.

This would mean that consumers will be indirectly compensated for being overcharged between October 2008 and March.

The authority and 11 trade unions have been at loggerheads following a meeting between both parties at the end of January. The unions are insisting that the regulator promised to revise water and electricity bills retroactively to October 1. But the authority maintains no such agreement was reached during the meeting.

The union leaders made a sworn statement at the law courts registry last week. They included General Workers' Union general secretary Tony Zarb, his deputy Geitu Mercieca, Malta Union of Teachers president John Bencini and Malta Union of Midwives and Nurses president Paul Pace.

After the oaths were taken, the authority said it had noted the text of the affidavit and saw "a confirmation of the Authority's interpretation of the events that occurred during and following the meeting (on January 30)". While the unions had been speaking about the revision of "bills", the MRA had been speaking about "tariffs".

The dispute over what was said at the meeting was just one twist in a saga that has been going on since the revision of the water and electricity rates was first announced in October.

In a letter to authority chairman Carmel Ellul sent last week, Enemalta CEO Karl Camilleri requested a "clear" indication of the principles the regulator was expecting the corporation to adopt.

"The sooner the meeting is held, the sooner we will be able to conclude the internal exercise to develop our proposal (for the new rates)," Mr Camilleri wrote. He said the corporation had indications that its projected "total expense" for 2009 would probably vary by 15 per cent - which is the amount of variation given by the government as the trigger for a change in tariffs.

The authority was not involved at all when the first set of tariffs were drawn up by the ministry but it now seems to be taking charge of the fresh set of tariffs.