New body to set electricity tariffs in future |03 November 2011

Mr Faure – who is also the Minister for Finance and Trade – was speaking in an interview at Electricity House after his team, made up of the principal secretary in the ministry, Ahmed Afif, and the director of the Forecasting and Analysis Branch unit Bertrand Belle, held talks with the chairman of the Public Utilities Corporation Benjamin Choppy and PUC’s chief executive Robert Stravens.

The talks were centred on how to make the corporation commercially viable, focussing on raising electricity tariffs so consumers as well as government can adequately support the corporation’s operations.

“The Energy Bill – which is being discussed by its various stakeholders – will say how much the PUC will pay for electricity produced by individuals who want to put it on the national grid,” he said.

“At the moment the PUC produces electricity, distributes and regulates its tariffs, but the new law will ensure that another body regulates tariffs, rather than the PUC,” he said.

“The law will also ensure that the PUC does not remain the only producer of electricity, so it will be a new environment, although the PUC will remain a strategic company for the country and its economy and for the production of electricity for the Seychellois consumers.

“So when we say it should become commercial, we mean it should operate like other entrepreneurs, competing with them and without getting any subsidies from the government.”

The new energy legislation will provide for large and small independent power producers based on renewable energy technologies tied to the national grid to operate in collaboration with the PUC.

Speaking earlier on the topic, the principal secretary for Transport and Energy, Philip Morin, had said the Energy Bill will mean that even electricity consumers will be able to operate micro-size solar photo voltaic or wind generators or both systems installed on their roofs to produce electricity for their consumption, and sell any extra energy they produce to the national grid.

Mr Faure said the PUC in the past went to seek money from government but there was not as much as they needed “so we decided to share the problems together”.

“Likewise we have decided to share the solution whereby Seychellois through the budget put down the money to finance PUC’s capital expenditure (Capex) but in the coming years we will cut the amount of Capex we give to the PUC as it should in the future be able to seek funds from commercial banks.

“Today the PUC cannot do that neither was it able to in the past, but in the future it should be able to finance some of its Capex, although the government will be there to inject money into PUC’s big projects for the benefit of the country.”

Mr Faure said the government will honour its pledge next year to give an annual R200 million to the corporation to help it develop its infrastructure, and announced the PUC will get a loan of
€38.7 million from the European Investment Bank, the Agence Française de Développement and the European Union to develop water and sewage projects.

The loan will be repaid over 20 years with a five-year grace period.
 
Mr Faure said the PUC is being encouraged to operate in such a way as to support itself, giving its services at prices that will help it recoup its costs, currently driven up by Japanese demand for heavy fuels after that country switched from nuclear-powered generators after their recent disaster.

He noted when tariffs go up, the social welfare weights used to help vulnerable members of society will be adjusted.