By HARLYNE J0KU
PNG will soon have a national policy on electricity which will introduce competition into the electricity industry and encourage other suppliers apart from PNG Power to provide power to the rural areas of the country, deputy chairman of the task force overseeing the electricity policy formulation, Henao Iduhu, said last Friday.
Mr Iduhu said the government in its NEC decision of No 271, 2006, have agreed to ensure that there is a coordinated effort by industry players in delivering electricity services.
He said the task force responsible for electricity policy formulation that was recently set up have just reviewed a report prepared by Frontier Economics and have now a Draft Electricity Industry Policy in place.
He added that for far too long the electricity industry in Papua New Guinea had been operating without a comprehensive policy framework that provides guidance to the way electricity is generated, supplied and retailed.
He said in the absence of such a policy framework, some degree of improvements have been realised in the last five years such as the performance of PNG Power which has improved over the years with the corporation operating profitably.
“The company (PNG Power) has shown a marked turn around due to managerial improvements and price increases authorised by ICCC (Independent Consumer and Competition Commission) since 2002,” Mr Iduhu said.
Activities by independent power producers have also increased with PNG Power having bilateral power purchasing arrangements with two operators and partners with the Hides Joint Venture in gas fire generation. It had also purchased rehabilitation services in respect of some of its plant from foreign service providers, Mr Iduhu said.
He said under the draft policy framework, the taskforce workshop was proposing the introduction of competition within the defined market segments. The other proposals in the draft policy also:
l Provides exclusive service areas for PNG Power
l Allows for free entry to serve large customers with loads of 10 MW or more .
l System of postage stamp pricing in the shape of a national single tariff which charges the same price for customers within a particular group regardless of location; and
l An independent regulator like ICCC which implements a form of revenue cap regulation on PNG Power .
Mr Iduhu said key stake holders at the workshop were invited by the task force to express their opinions on the recommendations of the Independent Consultant Frontier Economics and also hear key policy agencies which were represented in the policy.