News | Wednesday, 11 March 2009

GRTU seeking quick solution to tariffs problem

The Chamber for SMEs (GRTU) yesterday said it had called on the Malta Resources Authority to remove any discrimination from the tariffs over the capping system for large businesses such as hotels and factories.
GRTU president Paul Abela said that the KPMG report explaining the tariffs made it clear that the capping system would be retained and that SMEs would be carrying the burden.
“After making our position clear with the Prime Minister and deputy PM Tonio Borg, they both reassured us our proposals were reasonable and would be taken into consideration. GRTU was therefore taken aback when we learnt that a meeting was called with some constituted bodies, excluding the GRTU, where an agreement was signed that would have diminished the cost of the biggest users, and eventually increasing it on the smaller ones,” Abela said.
Abela said the GRTU and the government have now been in discussion over the tariffs for six months. “GRTU is tired of the current situation,” Abela said, calling on the prime minister to intervene and put the Maltese population’s mind at rest on the issue.
Director-general Vince Farrugia said small enterprises’ rights were being ignored.
“The new electricity tariffs infringe the Electricity Directive because they have a strong element of discrimination.”
Farrugia insisted it was up to the MRA to ensure non-discrimination, effective competition, efficient functioning of the market and a high level of transparency by the monopoly undertaking and itself, as per the Directive.
“GRTU has already taken the issue to the European Courts, which has insisted we exhaust the local jurisdiction’s procedures. GRTU is presently doing exactly that by insisting that the issue of non-discrimination is removed by the MRA.”
Farrugia said government enjoyed the GRTU’s support in the face of the global economic crisis. “It is doing well by moving ahead and helping industry… it is however unacceptable for government to help industry without helping SMEs. I would like to remind government that SMEs in Malta employ 65,000 persons and to government these should not be any different from the workers in hotels and factories.”
Farrugia said that small enterprises could not ignore their electricity and water bills. “It would close down their business. The only expenses they can afford to give up when the going is slow is one or two of their employees. GRTU would rather not have this situation occur and we are sure that to government, safeguarding the employment of a worker at a hotel is as important as safeguarding whoever works in a small enterprise. The electricity tariffs are threatening their livelihood. GRTU therefore proposes that this burden is alleviated.”
The GRTU claim the Electricity Directive is being infringed as the new tariff structure could not have been introduced until a due diligence impact assessment was carried out for all end consumers.
“The Minister for Resources and Rural Affairs and the Authority have acted against public interest, customer protection and the scope of the Directive when they endorsed the tariffs issued in December 2008, by the said monopoly utility, backdated and without proper investigation and analysis resulting in unfair and discriminate application on public groups, affecting SMEs extremely negatively. Enemalta and the Minister responsible for the said entity did not submit the new tariffs to MRA for approval prior to their entry into force as required by the MRA Act, the Electricity Directive and the Maltese legislation in place,” the GRTU’s Joseph Attard said.


1. Electricity provider should not incur loss in its operations; stricter controls should be put in place to benchmark all operations and processes.
2. Return on capital employed based on longer-term recuperation of invested capital, moving away from current EU proposal for just over 6%.
3. Large account holders should not be given quantitative discounts under EU principle of “Think Small First”; 10 or 20 users together use the same energy as one large account holder.
4. Enemalta billing since 1 October goes beyond government’s powers, considering both MRA and minister ignored the Electricity Directive.
5. Billing for non-residential accounts consuming less then 1.2 million kWh will for a period of time benefit from a reduction in the billing to make up for the bill received to date. This should consist of a one-time reduction of 40% of the value of units billed from 1 October 2008 until when the new tariffs are issued, according to appropriate and acceptable guidelines.
6. All new applications for electricity made to pay the new tariffs (€300/€900) for new installations before 1 October must be reimbursed the difference.
7. Removal of the payment of maximum demand to SMEs and non-residential users affected



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11 March 2009

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