Tonga announces large electricity tariff reduction

Tonga Power Limited has announced its lowest electricity tariff in 14 years, that will be effective from Wednesday, 1 July 2020.

This follows the confirmation of a decrease in diesel prices from $1.5091 per litre in March 2020 to $1.0419 per litre in June 2020 (an accumulated reduction of $0.47 per litre or 32% reduction in total.

A recent release states that the accumulated price reduction from 15 March 2020 to 15 June is driven mainly by the ongoing and current economic impact of the worldwide COVID-19 pandemic.

Therefore, the new published rate for electricity will be reduced by a total of $0.1198 per kWh (16.4% reduction) per kWh to $0.6102 per kWh from the current tariff of $0.7300 per kWh set back on 1 April 2020.

The new price will last for 3 months unless otherwise reviewed.

The tariff set back in April 2020 $0.7300 per kWh, Government of Tonga (Shareholder) subsidised $0.08 kWh Lifeline Tariff (known as Government Policy Obligation or GPO), to all residential customers consuming 100 or less kWh of electricity per month.

The new electricity tariff of $0.6102 per kWh was approved by the Electricity Commission.

Since the new electricity price is less than $0.65 per kWh, there is no Lifeline-Tariff GPO effective from 1 July 2020.