Proposed night tariffs 'don't make sense', consultants told PN government

Consultants KPMG had poured cold water over the Nationalist Party's electoral pledge to introduce night tariffs between 10pm and 6am, arguing it would not be feasible.

During the electoral campaign, the PN announced that, if re-elected, it would introduce cheaper electricity tariffs during the night. Labour had then described the pledge as a "panicked reaction" to the PL's energy plan.

An email sent to the Finance Ministry on 17 January from KPMG had informed Tonio Fenech - then finance minister - that the period between 10pm and midnight was characterized by "high demand with a relatively higher interconnect cost".

"Prices in Sicily really decline significantly at midnight and achieve even more attractive levels after 1am. The feasibility of a reduced tariff between 10 pm and midnight is doubtful," KPMG had said.

The PN government was suggested that "with the computed tariffs being mitigated to be advantageous but still indicating little economic benefit to consumers, you may wish to re-evaluate whether to include this period in the definition of night time".

The email was revealed by Energy Minister Konrad Mizzi during a press conference held in Valletta.

"A panicked PN, who dubbed our own energy plan 'Alice in Wonderland', rushed and hastily sought to create something to counteract our promise of reduced electricity bills," Mizzi said.

"Tonio Fenech and Richard Cachia Caruana approached KPMG to draft a report after we announced our energy plan."

Mizzi said that despite consultants telling them to reconsider their proposal, "the PN forged ahead and included it in its electoral manifesto, deceiving the public". He said the PN's plan had been based on the assumption that the interconnector would be in place by 2014 - "despite knowing the project was delayed" - and on the the assumption that all smart metres would be in place.

As of March, there were around 44,000 smart metres in place. Today there are 110,000.

"That's the difference between Labour and the PN: we study our plans and implement what we promise. Simon Busuttil, the author of the PN's electoral manifesto has a lot to answer for," Mizzi said.

Asked about the €64 million savings Enemalta was to make by March 2014 through the efficiency of the BWSC power station extension, he said that the plant would still consume €35 million in fuel costs, with the state corporation set to lose €45 million.

Mizzi also said that a Labour government would consider introducing night tariffs once the energy mix, interconnector and all smart meters would be in place.

In a reaction, the PN said that during the electoral campaign, Konrad Mizzi had guaranteed that the price of electricity would be fixed for 10 years. "Despite 8 months have passed since the general election, the energy minister has failed to come forward with a 10-year fixed-price agreement. It is now clear to everyone that this is impossible," the PN said.

The Opposition added that while the Maltese were still waiting for Mizzi "to implement this guarantee, government found the time to directly employ his wife on a €13,000 monthly salary".

Nothing on the KPMG email revealed by Mizzi was said.