Seven Questions ARMS Needs To Answer About Malta’s Higher Electricity Bills
Electricity billing company is keeping Maltese consumers in the dark
As complaints continue flooding in about the new system being used to calculate households' electricity bills, Malta’s energy billing company ARMS has refused to answer some point-blank questions about it.
Energy Minister Joe Mizzi today pledged to look into consumers’ complaints but insisted nothing has changed since 2009. Meanwhile, ARMS’ website has been down all day and is merely reading 'Work in progress' - perhaps indicating some imminent changes are in the pipeline.
With confusion reigning, these are some questions we believe ARMS needs to answer.
1. Why did ARMS decide to start billing households every two months?
The current electricity ‘banding’ system - whereby tariff rates get progressively more expensive depending on how much electricity is consumed - has been in place since a legal notice was introduced in 2009. The legal notice gives ARMS leeway to bill people on a pro rata basis (yearly, monthly, weekly etc.), which until recently was largely every six months. However, more and more households are now getting billed every two months and, instead of being allowed to progress through their bands throughout the year, they are having their bands ‘rationed out’ every two months. This means that many households are being forced to pay for electricity at the higher band rates when their consumption spikes for two months, even when their annual consumption isn’t high enough to reach those rates.
Why did ARMS decide to go for a system that is ultimately leaving consumers with higher utility bills?
Explanatory graph compiled by economist Neville Zammit
2. How many households have been added to the new system since 2009?
Although this billing system has become more commonplace recently, some consumers have been complaining about it for years. Indeed, some people have even taken to social media to say they have been receiving their bills in this manner since the days of the last PN government.
3. How many households are currently being billed every two months?
To get an accurate picture of the situation, we need to know how widespread it actually is and how many households are currently receiving their utility bills every two months. When asked this question, ARMS told us it is currently issuing 78% of utility bills based on actual readings, up from 48% in 2013.
This spike can be widely credited to the introduction of smart meters a few years ago, which allowed ARMS to deliver more accurate electricity consumption readings more frequently. Does it mean that 78% of Maltese households are receiving their bills through the new system though?
4. How does ARMS decide which households to bill every two months and which ones not to?
While more people are now receiving their bills in two-month periods, others are still receiving it every six months. Is there method to the madness? Does ARMS have a way of deciding which households to change to the new system and which ones not to or is it all completely random?
Smart meters have allowed ARMS to bill consumers more accurately and more frequently
5. Why didn’t ARMS inform consumers before introducing this system?
Perhaps the real kicker. In fact, a lot of the public anger is not directed so much at the system itself but at the fact that it was introduced without any prior notice. In the lack of a proper explanation by ARMS, political controversy is fermenting. Indeed, Opposition leader Adrian Delia has already suggested this is all a secret ploy by the government to make up for its losses generated from the LNG power station deal.
6. How much has ARMS profited from the new system?
With the old system, a household had to consume a load of energy to start paying at the higher rates - 10,000kWh a year to pay at the 34c per unit rates and 20,000kWH a year to pay at the 60c per unit rates. However, the new system means households start paying fourth band tariff rates if they consume over 1,668kWh every two months and fifth band tariff rates if their bimonthly consumption exceeds 3,333kWh - not improbable in months when cooling and heating equipment are constantly switched on.
It seems clear that ARMS has profited as a result of this system - question is by how much.
7. Will ARMS refund aggrieved consumers?
This is what people in the Up In Arms activist group are demanding. The law clearly states that the tariff band rates are based on a cumulative consumption per year, thereby indicating that households should only be charged at the higher rates if their annual consumption hits those levels. However, it has been noncommittal so far, merely telling aggrieved consumers that they have been following the law.
We will wait and see...