Introducing more players in the electricity retail industry does not guarantee a drop in prices.
Acting CEO of the Independent Consumer and Competition Commission (ICCC), Avi Hubert, tells Loop PNG that this is not necessarily the case as there are other factors that affect the price.
“There are other utility costs, issues of law and order, (and) security, those are the cost and how it can affect retail price,” he said.
The issue was raised by CEO of the Manufacturers Council of PNG, Chey Scovell, who said the high cost of electricity, among other costs, was scaring potential investment and killing domestic businesses.
Scovell said the issue needed open discussion and policy to reduce the cost of electricity.
Although there are seven players in the electricity ‘Generation’ segment of the market, PNG Power is the only electricity supply ‘Retailer.’
The other six players in the ‘Generation’ segment sell their excess power to PNG Power.
They include PNG Forest Products, Lihir Gold Mining Limited, Hanjung Power Limited, New Britain Palm Oil, Ok Tedi Mining Limited, ExxonMobil PNG, Daewoo Power Limited.
Hubert says if is there is policy to open up this market then the ICCC could look at the issue of retail pricing.
The ICCC sets the tariff price however, there is currently a freeze on electricity tariff by the government, which stops any increase in electricity cost.
Currently, a five-year regulatory contract between ICCC and PNG Power is in place.
The contract sets the price for electricity and the service standard.