Small businesses punished by progressive billing of energy units – PN

Nationalist MP Ryan Callus has insisted a PN pledge to refund €50 million in overcharged energy bills and to reform the ARMS billing system, does not punish business owners as claimed by the Labour government.

Callus said the ‘annualisation’ of bills calculating energy units consumed would primarily benefit small businesses whose lower level of consumption is billed progressively higher as consumption increases.

The Labour government insists the current billing structure is fair by making energy units cheaper when a certain level of high consumption is achieved.

But Callus said small business owners which never reach that peak at which energy units then become cheaper, are punished by the ARMS billing system.

“Our proposal speaks of small business consumers, whose bills gradually increase throughout the first bands of energy consumption. The Labour government in trying to ridicule us by speaking only of large businesses, and completely forgetting about smaller companies, or enterprises like retail shops and other so-called ‘one-man shows’. There is a probability that these small businesses are also getting robbed when they pay their energy bills.”

Callus said official EU data shows Malta not just as the EU country with the fifth highest rate of energy cost, but when excluding taxes paid, the second highest.

The commercial tariff has nine bands to it, where the first five tariffs increase with consumption but then reduce progressively through the remaining four bands. That makes these last four bands significantly cheaper than the first five.

Energy minister Miriam Dalli insists that with the PN’s proposal, businesses will first be charged for all the ‘expensive’ tariff bands before they can start benefiting from the cheaper units.

“Electricity tariffs for businesses increase progressively up to the first 60,000 units per year, reaching the peak price. When this amount is reached, tariffs start decreasing and for every additional unit, businesses pay lower rate,” she said.

According to the current system, bills for businesses are issued on a monthly basis. That means that it is the units consumed in each particular month that get distributed over the various bands, making it likely for high-consumption businesses to surpass the threshold allowing them benefit from the cheaper tariffs.

“With the PN’s proposed annualisation method, businesses will be forced to consume all of the more expensive bands before they can benefit from the cheaper bands. This means that Maltese and Gozitan businesses will continue to pay higher rates for a longer period and it will take them much longer to reach the lower tariffs when compared to the current system,” Dalli said.