Electricity (Amendment) Bill seeks to lower high electricity cost

The Minister of Mines, Energy and Rural Electrification, Bradley Tovosia has tabled the Electricity Amendment Bill in Parliament yesterday with the aim to improve and modernize the existing out of date and costly Electricity Act.

The electricity sector in the country has been operating over the years under the Electricity Act of 1969 with its subsidiary legislation, including its Regulations and is responsible for the generation, transmission, distribution, retail, and regulation of electricity with the mandate to provide efficient and profitable electricity throughout Solomon Islands.

The Electricity (Amendment Bill) 2023 amends the Electricity Act to improve and update the existing Act to enable Solomon Islands to fully take advantage of the positive developments in the electricity sector.

Tovosia said the current Electricity Act is out of date and some of its provisions are no longer relevant to the interest and welfare of the public in the modern day.

“Solomon Islands has the highest cost of electricity in the Pacific, a sad reality for the past 10 years or so, and the Government is adamant to make positive changes to address this, ”Tovosia said in Parliament on Monday.

Currently, Solomon Islands still lags in accelerating the transition to renewable energy due to this old and out-of-date Electricity Act that constitutes SIEA as a vertically integrated utility with exclusive right to provide electricity to the whole country and self-regulate its operations and tariff charges.

Despite being a financially strong and professionally managed utility, there are challenges in relation to affordability of SIEA’s tariffs, transparency in implementation of its investment program, and the less favorable environment for entry into the electricity market for independent power producers (IPPs) and small-scale self-generators.

This Amendment of the Act is the outcome of studies conducted on improvement to the electricity sector to meet key objectives under the national energy policy (SINEP).

The policy seeks to improve on a number of areas including improved coverage and cheaper electricity cost, reduce dependency on imported fossil fuels, which will decrease electricity cost while bringing environmental benefits, decrease technical and non-technical losses and increase private sector participation.

Tovosia said the Bill sets the scene for further reform of the energy sector to promote private sector investment in renewable energy, create enabling framework for roof-top-solar integration into the grid which will increase the national renewable energy mix and reduce dependency on imported diesel fuel for electricity generation.

The enactment of the Bill envisaged to un-bundle the corporate structure of Solomon Power to operate solely as grid operator on profitable grids like Honiara while delegating the electricity generation component entirely to independent power producers while refocusing its attention on expanding electricity access into rural areas.

It also seeks to establish an independent electricity sector regulator and to open up roof-top-solar integration to the grid. This is soon to be implemented as soon as the national grid code is completed this year.

The current Electricity Act was enacted in 1969. Since then no substantial amendment was done to it with the exception of some amendments done to it in 1988. As such, the current Act is out of date and no longer prioritizes the interest and welfare of the public. Solomon Islands has the highest cost of electricity in the Pacific.

ENDS///

– Government Communication Unit