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Once again Wavel Ramkalawan thought he was the brightest politician in the National Assembly, but during the first sitting of the third term, Environment, Energy and Climate Change Minister Wallace Cosgrow stopped him in his stride.

After Speaker Nicholas Prea had allowed him to pose his Private Notice Question, the Leader of the Opposition in the National Assembly Wavel Ramkalawan wanted to know on which legal basis or regulation the Public Utilities Corporation (PUC) used to implement the increase in tariffs.
Minister Cosgrow was short and sweet in his answer: “Section 17 (2) of the PUC Act of 1996 allows the corporation to undertake revision of tariffs and other charges in relation to its services. The same law provides the minister responsible for PUC with the power to set up regulations to ensure that these changes become legal. The recent tariff increase became effective through the Statutory Instrument (S.I) 55 of 2018 which was officially gazetted on August 30, 2018.”
The minister proved to Wavel that he can no longer take people for fools as the people are following his every move.    
The question came as a result of PUC’s decision to increase the tariffs of electricity, water and sewerage effective September 1, 2018.
For his part, the leader of government business Charles Decomarmond, who had tabled the PUC tariff questions on August 20 when the Assembly was in recess, wanted to know the reason behind the decision.
In his answer, Minister Cosgrow pointed out that the tariffs for PUC’s three services – electricity, water, sewerage – have increased as per its tariff rebalancing programme to guarantee sustainability of these services for years to come and for long-term financial investments.
He added that the current tariff structure has elements called cross-subsidisation, meaning one sector is subsidising another sector. Mainly it is the business sector paying more in terms of electricity to sustain the much lower tariffs in the domestic sector.
Previously PUC had explained that the utilities tariffs for homes are currently not reflecting the real cost of production and it is only through the rebalancing programme that tariffs increases will be scheduled every year to gradually even out this gap.
Minister Cosgrow added that “PUC has acknowledged the impact the increases will have on its customers and that is why the rebalancing programme is a long-term one; so that the impact is minimal.”
PUC has gone a step further helping customers who are struggling to pay their bills. The company is starting a democratisation of photovoltaic systems that will help these vulnerable homes.
Minister Cosgrow said PUC estimates that it will accumulate R24 million each year from the rebalancing programme. For the past two years, PUC’s profits were R311 million (in 2016) and R227 million (in 2017). The predicted profit for the year 2018 is R240 million.
In order to lower the cost of utilities, Minister Cosgrow said PUC and the government are working on various initiatives and the most important is the generation of electrical power through LNG (Liquefied Natural Gas).
Initiated by the PUC in 2013, the tariff rebalancing programme aims to encourage responsible consumption and use of utilities by consumers to help the PUC maintain long-term financial investments to continue improving and developing infrastructure for water, electricity and sewerage to subsequently improve services for consumers.
The programme scheduled for every November each year was put on hold in 2015 but now government has approved for it to resume with effect from September 1 this year.
It was President Danny Faure who stated in his State of the Nation address delivered on March 6, 2018 in the National Assembly that the tariff rebalancing will take place on September 1, 2018.
“With regards to electricity, we have decided that the ‘rebalancing’ exercise of tariffs between the residential and commercial sectors that would have taken place in November 2017, will now take place from the 1st of September 2018,” President Faure said.

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