After months of close monitoring of imported fuel costs, Te Aponga Uira (TAU) is pleased to be able to announce a $0.05 reduction of the temporary fuel surcharge from $0.15 to $0.10 per unit across all tariff groups effective 3^rd May 2023.

The imposition of the fuel surcharge, effective 3^rd October 2022, was necessary due to the significant impact of high fuel costs to TAU’s financial position and sustainability. It should also be noted that the surcharge covers only a portion of the existing fuel cost increase and TAU continues to shoulder a substantial part of this burden for our customers by absorbing half of the increase in fuel costs that TAU is incurring for the delivery of power.  Since the introduction of the temporary fuel surcharge, TAU has had a monitoring framework in place. The current and consistent pricing of fuel has met the threshold for a reduction in the surcharge.

The average tariff (exclusive of the temporary fuel surcharge) for a number of years on Rarotonga is NZ$0.74 per unit. This allows TAU to cover its operational costs as well as delivering extensive and necessary capital replacement and investment programmes, without relying upon Government for its business as usual operations. When comparing electricity tariffs with other neighboring countries, it is not as simple as comparing the price in US dollars per unit. Electricity tariffs are made up of different elements including energy sources. For example, some countries such as Fiji and New Zealand, who have access to hydro dams, have hydro generation which reduces operating costs and utilises renewable energy on a much more consistent basis. Other countries have a higher solar PV penetration, and still others are subsidised by their respective Governments. Such factors are generally not disclosed on online lists that compare international electricity prices. TAU acknowledges and welcomes the consultation currently taking place to introduce an independent regulator of utilities, the advantages of which are clear. TAU supports a regulation policy and legislation which is fit for purpose and works for our small islands context and that does not impose unnecessary and avoidable burden.

TAU is moving forward with its Renewable Energy (RE) projects specifically for 6MW of Solar RE through the installation of 2MW at and around the Rarotonga Airport area, and 4MW through Independent Power Producers (IPPs) from the community. The achievement of this 6MW RE is expected to take Rarotonga’s RE contributions from 16% to around 35%. The expectation in the longer term is that RE will eventually displace diesel generation on the island, reducing upward pressure on electricity tariffs.

Electricity is a vital service to our community, and it is essential that this service is reliable and sustainable over the long term. TAU’s statutory objectives are to provide energy to all consumers in a reliable and economical manner; and to operate its facilities efficiently and profitably with due regard to the community’s interest.

TAU, and its Shareholder, CIIC, do not take these objectives lightly. Like other commercial entities, TAU continues to operate in this challenging environment with volatile fuel prices that have impacted its ability to operate responsibly and sustainably.

We recognise that the fuel surcharge is not ideal and assure our customers, that we will continue to monitor fuel prices and look forward to further reduction and eventual removal of the surcharge. For those of our customers who are experiencing financial hardship, we encourage you to come in to discuss payment plan options with the team at TAU.