ICCC wants cut to power cost

Business
Source:
The National, Tuesday July 12th, 2016

 By HELEN TARAWA
WORK is underway to facilitate competition in the power-generation sector to reduce cost, according to the Independent Consumer and Competition Commission.
Principal technical analyst Simon Augustine told The National that if the requirements of the Third Party Access code and Grid code were fully implemented, there would be a reduction in tariff and an improvement in power reliability.
Augustine said PNG Power Limited had only three “profit-making centres” with hydro-based grids: Ramu, Port Moresby and Gazelle.
The other 14 centres are “loss-making centres” and use diesel-power.
He said PNG Power could not ignore these stations because it had to provide electricity to everyone. It subsidises the centres from the profit gained from the main grids.
He said the Independent Consumer and Competition Commission (ICCC) was also responsible for issuing the electricity undertaker’s licence to the power utilities operating outside PNG Power’s exclusive zone and independent power producers who sold wholesale power to PNG Power. PNG Power has submitted the power reference prices for the Ramu system and is yet to submit the ones for Gazelle and Port Moresby.
“The the Independent Consumer and Competition Commission is reviewing power purchase reference price for the Ramu system,” Augustine said.
“The power purchase reference price would be the least cost generation option in a particular area taking into consideration all other options in that area.
“Once the price is determined, it will be set as the price cap for that grid for which any future IPPs wishing to sell whole sale power to PNG Power Limited, have to demonstrate in its PPA that it’s whole sale power price is lower.”