A Closer Look at the Minister’s Call to Cut Power Costs -Is a 70-Seniti Tariff Realistic?
By Tuʻifua Vailena, Nukuʻalofa, June 2025
The Minister for Public Enterprises, Hon. Piveni Piukala, has called on Tonga Power Ltd (TPL) to reduce the national electricity tariff to .70 seniti per kilowatt-hour—down from the current rate of .9778 seniti. While the sentiment behind this call may resonate with a population grappling with rising costs, the proposal raises more questions than answers. Chief among them: has the Minister read the utility’s latest financials? Because if he has, he must know that what he is demanding is near-impossible without considerable consequences.
TPL’s most recent annual report reveals a utility operating on the thinnest of margins. In 2023–24, the company generated 66.89 GWh of electricity and earned TOP 65.4 million from energy sales. Including fees from reconnections, meter hire, and other services, total revenue reached TOP 82.3 million—yet the year closed with a net profit of just TOP 1.85 million. That equates to a return on assets of less than one per cent.
The minister’s proposal to cut the tariff by nearly 30 per cent would strip away an estimated TOP 1.6 million in monthly revenue—amounting to roughly TOP 19 million annually, or nearly a third of TPL’s core electricity income. That one policy move would erase the company’s profit twelve times over and plunge it deep into deficit, crippling its ability to maintain infrastructure, modernise the grid, or invest in Tonga’s transition to renewable energy.
Some critics have pointed to the rise in solar generation as a missed opportunity for reducing tariffs. This, too, deserves a closer look. Since the first solar farms and rooftop systems were integrated into the national grid, renewables have grown to account for between 12% and 15% of total generation—peaking at 24% in high-sun months like December 2023. These investments have made a real difference. Without them, Tonga would still rely almost entirely on diesel, requiring an additional 2.5 million litres of imported fuel per year. That alone would have cost TPL an extra TOP 6.7 million annually, and likely pushed the tariff above TOP 1.08 per kWh.
So why hasn’t the tariff dropped? The answer is both practical and economic: renewables have helped prevent the tariff from rising, not necessarily driven it down. The real savings have gone into shielding customers from the worst of diesel volatility, not into headline-grabbing price cuts. And even with renewable generation on the rise, Tonga still needs diesel capacity for night-time supply, backup, and peak demand—plus the infrastructure and staff to manage a complex island-wide grid.
It is tempting, especially in an election year, to campaign on numbers like .70 seniti. But promises without plans are no substitute for policy. To make electricity more affordable in a meaningful and sustainable way, Tonga needs targeted measures—such as subsidies for vulnerable households, investment in grid efficiency and battery storage, and smarter procurement strategies to hedge against fuel price swings. It also needs continued access to regional and international financing mechanisms that support clean energy expansion without burdening the public purse.
Leadership is not about applause lines. It is about difficult decisions made in full view of the facts. The Minister’s proposal is appealing on the surface, but the math does not lie. Unless he is prepared to announce where the TOP 19 million annual shortfall will come from, the call for a 70-seniti tariff reads less like a policy solution and more like a political flourish—one that risks doing more harm than good.
Cheaper electricity is a worthy goal. But it will be achieved through sound economics, not slogans. If the Minister wants to lead Tonga toward lower tariffs, he must begin by grounding his proposals in the fiscal realities that TPL—and the public it serves—must face every day.
