Nuku’alofa, Tongatapu– Questions are growing among electricity consumers across Tonga over the cost, reliability and management of the country’s power supply, with concerns being raised about why electricity bills remain high and why power disruptions continue to affect households and communities.
The concerns extend beyond Tongatapu to communities in the outer islands, where consumers continue to question the differences in monthly electricity charges and the overall cost of power.
For many families, the price of electricity remains a significant household expense. At the same time, repeated power interruptions have added to public frustration, particularly when outages occur without clear explanations about their causes or how long they are expected to last.
Sunday outages, in particular, have caused disruption for families and church communities, affecting people’s ability to attend services and carry out normal household activities.
A recent editorial review by Radio 88.1FM has raised questions about the underlying reasons these problems continue and whether sufficient measures have been taken to address them.
However, concerns about the Tonga Power Limited (TPL) go beyond service reliability.
The 2024 Audit Report of Tonga Power Limited, tabled in Parliament and subsequently made available to the public, highlights a number of significant concerns relating to expenditure, financial management, internal controls and the company’s billing processes.
Spending far exceeds approved budgets
One of the key concerns identified in the audit relates to expenditure by the company’s management and Board.
The audit indicates that, in several areas, actual expenditure substantially exceeded the amounts approved in the annual budget.
One example, highlighted on page 108 of the audit report, concerns rent and lease expenses.
The approved budget for rent and lease expenses was $276,396.
However, expenditure at the end of the financial year reached $698,781.
This represents an overspend of $422,385 above the approved budget.
The significant difference between the approved budget and actual expenditure raises questions about the company’s ability to effectively control and monitor its spending.
The audit indicates that expenditure controls remain an area of concern and that the issue had not been fully resolved.
Legal and professional fees soar
The audit also highlights substantial expenditure on legal and professional fees.
According to the report, the approved budget for these expenses was $26,700.
However, actual expenditure at the end of the year had increased dramatically to $567,077.
This represents an overspend of approximately $540,377 compared with the original budget.
The figures raise questions about how such a substantial increase in legal and professional expenses occurred and what mechanisms were in place to ensure that expenditure remained within approved limits.
The audit continues to identify financial control issues associated with expenditure management.
Concerns over bonding policies and financial controls
The audit raises further concerns relating to the company’s bonding policies and associated financial controls.
The Auditor-General noted concerns regarding the reliability and management of certain accounts, as well as transactions that were undertaken without sufficient documentation or prior written agreements.
Such weaknesses in financial controls can create risks for accountability and transparency.
For electricity consumers, these concerns are particularly important because the company’s financial management ultimately operates within a system funded by electricity revenues and other sources of financing.
Billing process remains a concern
Another significant issue identified in the audit concerns controls over the billing process.
On page 119, the audit identifies three areas where weaknesses remained:
- Errors in invoices or the tariff rates used to calculate electricity charges.
- Meters that are not functioning or recording accurately.
- Incorrect meter readings.
These weaknesses can directly affect consumers.
If a meter is not functioning correctly, a reading is inaccurate, or an incorrect tariff is applied to an invoice, the resulting electricity bill may not accurately reflect the electricity actually consumed.
This raises an important question for consumers: How confident can customers be that their monthly electricity bills are accurate?
Outstanding concerns over bank loans
The audit also raises questions regarding TPL’s financial obligations and loans with ANZ Bank.
On page 120, the report indicates that there were financial records and information that were not fully available for audit examination.
The Auditor-General also raised concerns about the Board’s ability to adequately review the reasons for the company’s bank loans and whether the company was consistently complying with the relevant loan agreements and conditions.
The audit indicates that further information was required regarding the loans and the company’s compliance with the terms associated with them.
The lack of complete information makes it difficult to obtain a full picture of the company’s financial position.
What does this mean for electricity consumers?
The concerns raised in the audit report are not simply accounting matters.
They go directly to questions of accountability, transparency, management and the cost of electricity services provided to the people of Tonga.
Consumers are entitled to ask whether the company’s financial controls are strong enough to ensure that public and consumer-funded resources are being used efficiently.
They are also entitled to understand why electricity costs remain high, why outages continue to occur and whether the company has effective systems in place to prevent billing errors and ensure accurate meter readings.
The audit findings therefore raise a broader question for Tonga:
If significant expenditure continues to exceed approved budgets, while weaknesses remain in billing controls and financial reporting, who is ultimately responsible for ensuring that these problems are corrected?
The Auditor-General’s findings provide an important basis for public discussion.
