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Constitution andFunCtion
The Fiji Electricity Authority was established, incorporated and constituted under the provisions of the Electricity Act of 1966 and began operating from first August of that year.
Members of the Authority are appointed by the relevant Line Minister. The Chief Executive Officer is an ex-officio Member and is responsible to the Members for the Authority’s management and for the execution of its policies. The powers, functions and duties of the Authority under the Electricity Act are for the basic purpose of providing and maintaining a power supply that is financially viable, economically sound, and consistent with the required standards of safety, security and quality.
A uniform tariff rate is charged for electricity used by each consumer group. The tariffs are fixed according to government policy, and are designed to meet specified targets while achieving a reasonable rate of return for the Shareholder.
The Authority is entrusted with enforcing the Electricity Act and regulations, setting standards, examining and registering electricians, and is empowered to approve and license suppliers to serve certain areas.
The Authority is also governed by the requirements under the Public Enterprises Act.
Letter to the Minister 1
Key Outcomes for 2009 3
Members of the Authority 4
Executive Management 5
Chairman's Report 7
Chief Executive Officer's Acknowledgement 13
Review of 2009 15
Financial Statements 29
Statistics 59
COVERConstruction work on FEA’s Nadarivatu Renewable Hydro Power Project is progressing smoothly, and is expected to be fully commissioned by August 2011. It will add 40MWof new power capacity, generate 101 million units of electricity in an average rainfall year, and reduce carbon dioxide emissions by 66,000 tonnes each year.
Vision‘Energising our People and our Nation.'
Mission‘We will provide clean and affordable energy solutions to Fiji and the Pacific.
We aim to provide all energy through renewable resources by 2011.'
ValuesCustomer focusHonestyCourage to do what is right for FEATeam workIndividual accountabilityTransparencyInnovativeness
addRess
Website addRess www.fea.com.fj
addRess oF tHe entitY’s ReGisteRed oFFiCeFiji Electricity Authority2 Marlow Street,Private Mail Bag,Suva, Fiji Islands
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Dear Minister,
Annual Report 2009
I am pleased to present Fiji
Electricity Authority’s Annual
Report for 2009. The report
provides a detailed summary of
FEA’s performance in accordance
with Section 25 of the Electricity Act
Cap 180.
FEA made a financial profit of $2.4m
after tax in 2009, after deducting
unrealized foreign exchange losses
of $5.3 million arising from the
devaluation of the Fiji dollar in April
2009.
Construction of the US$150 million
Nadarivatu renewable hydro power
project progressed positively in
2009 and approximately 10 per
cent of the construction work has
been completed at the year-end.
The project is expected to be fully
completed by August 2011.
The Honourable Minister for Works, Transportand Public UtilitiesLevel 4, Nasilivata HouseRatu Mara Road, Suva
This project is a major step towards
achieving the Authority’s renewable
energy target of generating 90%
of its energy through renewable
resources by 2011.
The Authority continued to meet
all its obligations and fulfill all
its responsibilities whilst also
continuing with efficient operation
of the power system.
On behalf of the Members of the
Authority, I take this opportunity
to thank the Government for
its continued support and look
forward to continued support in
2010 and beyond.
Sincerely,
Nizam-ud-Dean
Chairman
Letter to the Minister
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The Honourable Prime Minister, Mr. Josaia Voreqe Bainimarama, with Sinohydro Corporation official during a site visit to the Nadarivatu Hydro Power Project in 2009. This hydro project has been accepted as a project of national importance by the Fiji Government.
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Key Outcomes for 2009• AUS$70millionloanagreementwas
signed on 19th January 2009 with
China Development Bank to fund the
Nadarivatu renewable hydro power
project, and US$58.8 million of the
loan was drawn-down in 2009. The
remaining US$11.2 million of the loan
will be drawn-down in March 2010. All
the three debt covenants essential to
ensure the loan draw-down in March
2010 were satisfied during 2009.
• FEAmadeafinancialprofitof$2.4
million after tax in 2009, equivalent
to a return on shareholder funds of
0.6%. This includes unrealized foreign
exchange losses of $5.3 million
incurred as a result of the devaluation
of the Fiji dollar in April 2009. This result
was achieved despite two unplanned
contingency events that adversely
impacted the financial performance in
2009 by $5.2 million being the flood in
January and Cyclone Mick in December.
The return on share holder funds
would have been positive 2.0% if the
unrealised exchange losses were not
incurred in 2009.
• ThefinancialpositionofFEAremained
strong throughout 2009. FEA’s gearing
ratio, as measured by Debt to Debt plus
CapitalandReserves,was39.76%as
at 31st December 2009, which is well
within the international benchmark
for power utilities of about 45%. The
shareholder value of FEA was $402
million as at the end of 2009, increased
from $384.5 million at the end of 2008
and $324.9 million at the end of 2002.
FEA’s total assets were worth $880.3
million, a substantial increase from
$737.7millionin2008and$456.7
million in 2002. This indicates that FEA
has added significant shareholder
valueoverthelast7yearssincethe
implementation of organisational
reforms.
• FEAincurssignificantnon-commercial
obligation (NCO) costs each year when
supplying subsidised electricity to rural
Viti Levu and to the whole of Vanua
Levu and Ovalau. FEA incurred about
$20 million of NCO costs when fulfilling
its social obligations in 2009, which is
deemed to be the dividend paid to the
Government by FEA for 2009.
• Anindependentresearchconducted
in December 2009 by Tebbutt
Research shows that overall customer
satisfaction level has improved in
2009 when compared with 2008,
with commercial customers showing
anincreasefrom69%to74%and
residential customers showing an
increasefrom69%to71%.
• Powersystemreliabilitywithinthe
control of FEA improved significantly in
2009 as measured by two world-class
reliability benchmarks. The controllable
System Average Interruption Duration
Index (SAIDI) improved from 1,810
minutes in 2008 to 920 minutes in 2009
and the controllable System Average
Interruption Frequency Index (SAIFI)
improved from 25.6 times in 2008 to
15.6 times in 2009.
• FEAspentatotalof$6.5millionon
rural and urban power development
projects. Of this amount, $4.6 million
was spent on completing 43 rural
electrification projects and a total of
1,685 rural customers were connected
in 2009. The remaining $1.9 million was
spent on completing 42 urban power
development projects.
• FEA’sCustomerContactCentre
performed admirably in 2009, prior
to Cyclone Mick in mid December,
with 93% of calls answered within 20
seconds and abandoned calls limited to
3.7%.
• Butoniwindfarmperformed
satisfactorily in 2009 with a total
generationoutputof7.2millionunits
of electricity, resulting in thermal
fuel savings of about $2 million and
reducing greenhouse gas emissions by
about4,700tonnesin2009alone.
• Detaileddesignsforweir,tunneland
power station for the Nadarivatu
renewable hydro power project have
been approved. Construction work
on the tunnel and weir structure
commenced in October 2009 and
construction work for the power
station commenced in December 2009.
Approximately 10% of the project work
has been completed at the year-end.
• WorkontheF$34millionmajor
projects to augment FEA’s transmission
network progressed according to the
work plan. Natadola substation to
supply power to the new Natadola
Bay Resort was fully commissioned in
April 2009. Commissioning of Kinoya
and Qeleloa substations commenced
in December 2009 but had to be called
off due to heavy rain & Cyclone Mick.
Nausori & Komo Park substations have
been completed up to 51% and 55%
respectively as per the work plan.
• Adetailed“FEAPowerSystemSecurity
Plan 2009 to 2014” was submitted to
the Minister for Public Utilities and to
the Minister for Public Enterprises on
27thAugust2009basedonFEA’slong-
term Power Development Plan.
• On5thFebruary2009,FEAsigneda
power purchase agreement with Pacific
Renewable Energy Ltd for a 18 MW
wood-fired biomass power station
near Vuda Point. On 26th August 2009,
FEA signed another power purchase
agreement with Iviti Renewable
Development for a 10 MW waste-to-
energy plant near Sigatoka.
• FEA’scommitmenttoembedding
a total safety culture across the
organization was reflected in a Lost
Time Injury Frequency Rate of 4.1,
compared to the benchmark of
maximum 5.
• FEAimplementedGovernment’s
directive to replace COLA and merit
payment system with a delivery-based
Performance Management System in
2009.
• FEAsecuredaTelecommunications
License in May 2009 and commenced
leasing a pair of dark fibre optic cables
between Central and Western Divisions
to Telecom Fiji Ltd from November
2009.
• FEAupgradeditsoutdatedtraditional
Rack servers to technologically-superior
Blade servers with Storage Area
Network and virtualized the operating
environment using VMware.
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Gardiner WhitesideDeputy Chairman
Ratu Napolioni DelasauMember
Bhuwan DuttMember
Isikeli Voceduadua Member
Nizam-ud-DeanChairman
John LowMember
Cama TuilomaMember
Hasmukh PatelEx-officio Member
Members of the Authority
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Anand NanjangudChief Information Officer
Eparama TawakeGeneral Manager Generation
Om Dutt SharmaGeneral Manager Network
John O'ConnorGeneral Manager Human Resources
Filipe NainocaGeneral Manager Customer Services
Sunil de SilvaChief Financial Officer
Fatiaki GibsonProject Director Nadarivatu
Tuvitu DelairewaGeneral Manager Commercial
Hasmukh PatelChief Executive Officer
Executive Management
Saumen BandyopadhyayGeneral Manager System Planning & Control
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Line Minister
Col. Timoci Lesi Natuva, the Honourable Minister for Works, Transport and Public Utilities, having discussions with Mr. Aiyaz Sayed-Khaiyum, Attorney-General and Honourable Minister for Justice, Anti-Corruption,Public Enterprises, Industry, Tourism, Trade and Communications, during the signing ceremony for the US dollar seventy million loan to FEA from China Development Bank. Col. Natuva is the Line Minister for the Authority.
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Nizam-ud-DeanChairman
FEA performed admirably
in 2009, both in financial
and non-financial terms.
It made a financial profit
for the year despite two
unplanned contingency
events that impacted the
financial performance
in 2009 by $5.2 million.
Productivity improvements
FEA has achieved since
2000 have significantly
contributed to the positive
financial result in 2009.
Substantial progress has
also been made on the
US$150 million Nadarivatu
renewable hydro power
project, which is planned
to be fully commissioned
by August 2011. When
commissioned, FEA would
have made significant
progress towards achieving
its stated renewable energy
strategy, which is to provide
at least 90 per cent of its
generation through the
use of sustainable energy
sources by 2011.
Chairman’s Report2009 Profitability
FEA made a financial profit of $2.4
million after tax in 2009, after booking
an unrealized foreign exchange
loss of $5.3 million arising from the
devaluation of the Fiji dollar in April
2009. This equates to a Return on
Shareholder Funds (ROSF) of positive
0.6%.
This result was achieved despite two
unplanned contingency events that
impacted the financial performance
in 2009 by $5.2 million – severe floods
in January 2009 incurred additional
costs of $1.1 million and Cyclone Mick
in December 2009 incurred additional
costs of $2.1 million and lost revenue
of $2 million.
The financial profit after tax would
havebeen$7.7millionifadjusted
for the unrealised foreign exchange
losses of $5.3 million that impacted
the financial performance in 2009. This
equates to a Return on Shareholder
Funds of positive 2.0%.
The profitability of FEA for the period
2001 to 2009 is illustrated in the graph
given below:
FEAagainincurredahighcostof$77.3
million for its thermal fuel ($89.2 million
in 2008). The fuel surcharge framework
that was in place from September 2006
was put on hold by the Commerce
Commission on 11th March 2009.
Operating Profit/ (Loss)
After tax Before tax
F$ m
illio
ns
After- tax Operating Profit/(Loss) to Account for NCO
Before adjusting for NCO After adjusting for NCO
F$ m
illio
ns
30
25
20
15
10
5
0
-5
-10
-152002 2003 2004 2005 2006 2007 2008 2009
181512
9630
-3-6-9
-12-15-18
2002 2003 2004 2005 2006 2007 2008 2009
However, a 15% increase in tariff rates,
excluding the Life-line residential
customer category, was implemented
from 1st September 2009 based on
approvals by the Cabinet and the
Commerce Commission.
FEA incurs significant non-commercial
obligation (NCO) costs each year when
supplying subsidised electricity to rural
Viti Levu and to the whole of Vanua
Levu and Ovalau. If FEA is reimbursed by
the Government for the NCO costs, the
profitability and return on shareholder
funds would have been better. It is
estimated that FEA incurred about $20
million of NCO costs when fulfilling its
social obligations in 2009. Although
the Public Enterprises Act requires the
Government to reimburse the NCO costs
to FEA, such costs are not refunded.
Instead, the Government has accepted, via
Cabinet decision CP2002 18th Meeting
dated 10th September 2002, that FEA’s
non-commercial contribution to social
and community services through its
electricity subsidies be recognised as
its annual dividend to the Government.
Therefore the deemed dividend paid to
the Government by FEA for 2009 is about
$20 million.
A notional adjustment to account for the
NCO costs would result in an after-tax
financial profit of $16.6 million and a
ROSF of positive 4.0% for the year. The
adjusted profitability numbers and ROSF
are shown below for the period 2001 to
2009.
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Return on Shareholder Funds to Account for NCO One of the main factors that affected the operation of the
wind farm in 2009 is the flood in January and Cyclone Mick
in December 2009. The cyclone caused the wind farm to be
closed down for precautionary measures.
It is a credit to the innovative design used for Butoni wind
farm that it did not suffer any damage, because the wind
turbines were able to be lowered to the ground before the
cyclone winds took effect. FEA used this as an opportunity to
carry out maintenance of the wind farm.
Progress on renewable energy projectsSignificant progress was made during the year on the
construction of the US$150 million Nadarivatu renewable
hydro power project. Detailed designs for weir, tunnel
and power station for the project have been approved.
Construction work on the tunnel and weir structure
commenced in October 2009 and construction work for the
power station commenced in December 2009. Approximately
10% of the project work has been completed at the end of
2009. The power station has a power capacity of 40 MW and
is able to generate about 101 million units of electricity in
a normal hydro inflow year, saving thermal fuel costs and
foreign currency leakage estimated in excess of F$25 million
per year at current oil prices. The power station is expected to
be fully commissioned in August 2011.
AUS$70millionloanagreementwassignedon19thJanuary
2009 with China Development Bank to fund the Nadarivatu
Hydro Power Project, and US$58.8 million of the loan was
drawn-down in 2009. The remaining US$11.2 million of the
loan will be drawn-down in March 2010. All the three debt
covenants essential to ensure the loan draw-down in March
2010 were satisfied during 2009.
Work on the F$34 million major projects to augment
FEA’s transmission network progressed according to the
work plan. Natadola substation to supply power to the
new Natadola Bay Resort was fully commissioned in April
2009. Commissioning of Kinoya and Qeleloa substations
commenced in December 2009 but had to be called off due
to heavy rain and Cyclone Mick.
FEA appreciates the support provided by the Government
through granting partial duty concessions for imported
thermal fuel and guaranteeing FEA’s borrowings. It is very
important that the Government continues to support FEA
to ensure that the long term financial sustainability of FEA is
maintained, for the following reasons:
• Theexistingaverageelectricitytariffrateof24.5cents
per unit is insufficient to recover the expensive diesel
marginal cost of average 30 cents per unit in 2009; and
• FEAincurssubstantialNCOcostsduetoitscorporate
and social responsibility to provide cross subsidies for
uneconomic rural power supplies.
Financial StrengthThe financial position of FEA remained strong throughout
the year. FEA’s gearing ratio, as measured by Debt to Debt
plusCapitalandReservesexcludingcash-inhand,was39.76%
as at 31st December 2009, well within the international
benchmark for power utilities of about 45%.
The shareholder value of FEA was $402 million at the end
of 2009, increased from $384.5 million at the end of 2008
and $324.9 million at the end of 2002. FEA’s total assets were
worth$880.3million,asubstantialincreasefrom$737.7
millionin2008and$456.7millionin2002.Thisshowsthat
FEA has added significant shareholder value over the last
seven years since the implementation of organisational
reforms.
Butoni Wind FarmButoniwindfarmgenerated7.2millionunitsofelectricityin
2009. This is the highest ever recorded generation since it
wascommissionedinJune2007.
Statistics for the wind farm, from the commencement of its
operationsinJune2007,aregivenbelow:
• TotalGenerationoutput = 14.3millionunitsof
electricity
• Totaldieselfuelcostsavings = F$4.4million
• Totalforeignexchangesavings = F$3.5million
• Totaldieselfuelsaved = 2,998tonnesofdiesel
• Totalemissionreduction = 9,345tonnesofcarbon
dioxide
Per c
ent
8.0
6.0
4.0
2.0
0
-2.0
-4.0
2002 2003 2004 2005 2006 2007 2008 2009
Butoni Generation kWh
kilo
wat
t-ho
urs
1400000
1200000
1000000
800000
600000
400000
200000
0
Jun
07
Aug
07
Oct
07
Dec
07
Feb
08
Apr
08
Jun
08
Aug
08
Oct
08
Dec
08
Feb
09
Apr
09
Jun
09
Aug
09
Oct
09
Dec
09
Before adjusting for NCO After adjusting for NCO
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ACHIEVED SUBJECT TO NOTIONAL ADJUSTMENT FOR DELAYED
IMPLEMENTATION OF TARIFF INCREASE – Actual ROSF before
adjustment is positive 2.0%; ROSF increases to 2.5% when adjusted for
delay in implementing the tariff increase by 1 month.
Unrealised foreign exchange losses due to Fiji dollar devaluation in
April 2009 have not been included In the above calculation, in-line with
FEA’s Statement of Corporate Intent for 2009.
•ACHIEVED–submittedon30September2009
•ACHIEVED–submittedon27July2009
•ACHIEVED–submittedon31January2009
•ACHIEVED–submittedon25May2009
ACHIEVED – actual proportion of diesel generation for 2009 is 39%.
ACHIEVED – Detailed designs for weir, tunnel and power station have
been approved. Construction work commenced in October 2009 for
Tunnel and Weir and December 2009 for the Power Station.
ACHIEVED 90% - project completion was on target until impacted by
Cyclone Mick
• NatadolawasfullycommissionedinApril2009.
• Kinoyacommissioningcommencedon12thDecember2009buthad
to be called off due to heavy rain & Cyclone Mick. Project completion
is about 91%.
• Qeleloacommissioningcouldnotcommenceduetorainyweather
and Cyclone Mick. About 85% of the project has been completed.
• Nausori&KomoParksubstationprojectscompletionsstandat51%
& 55% respectively.
ACHIEVED-submittedon27thAugust2009.
ACHIEVED
• SignedaPPAwithPacificRenewableEnergyLtdforabiomass
power station at Vuda in February 2009.
• SignedaPPAwithIvitiRenewableDevelopmentforwaste-to-energy
power plant in August 2009.
ACHIEVED
• 13fullBoardmeetingsand17SubCommitteemeetings(comprising
Human Resources, Audit & Finance, Major Projects and Land) held
during the year.
• Comprehensivefinancialpoliciesandproceduremanualdeveloped
and implemented in June 2009.
• FEA’sBusinessRisksimprovedbyoneormorelevelforsevenoutof
a total of 11 top business risks.
1 Achieve a ROSF target of at least 2.5% provided an average 3.2
cents per unit (15%) increase in tariff rates is implemented in
2009 and the import duty concessions approved for diesel oil
(10 cents per litre) and heavy fuel oil (6 cents per litre) will be
continued for the full 2009 year and that the fuel prices will
remain at levels assumed for 2009 in Section 1.9.2 of the SCI.
2 Fully comply with the following statutory requirements:
a Submission of 2010 to 2012 Corporate Plan, SCI and EIRP by
30 September 2009
b Submission of half year report for 2009 financial year by 1
August 2009
c Submission of draft annual report and un-audited financial
accounts for 2008 by 31 March 2009
d Submission of the annual report and audited financial
accounts for 2008 by 31 May 2009
3 Limit the volume of diesel generation to 45% or less of total
generation in 2009 subject to Monasavu generating at least
400 GWh in 2009 as per the 2009 Statement of Corporate Intent
assumptions
4 Ensure that the detailed design is approved and weir, tunnel
and power station construction commences for the Nadarivatu
Renewable Hydro Power Project
5 Ensure Natadola, Kinoya,and Qeleloa substation projects
are fully commissioned and 50% of Nausori and Komo Park
substation projects are completed by 31 December 2009
6 Submit a detailed 5-year plan to the Minister for Public Utilities
and to the Minister for Public Enterprises by 31st August 2009 for
“FEA’sPowerSystemSecurityPlan2009to2014”basedonthe
long-term Power Development Plan approved by the Board
7 SignaPowerPurchaseAgreement(PPA)withanIndependent
Power Producer (IPP) before 31st December 2009 to develop at
least one new IPP power plant
8 Monitor FEA’s governance framework to ensure strict adherence
by the management and staff, and take appropriate mitigation
action where required
Achievement of Board Key Performance IndicatorsFEA signed eight Key Performance Indicators (KPIs) for 2009 with the Hon. Minister for Public Enterprises to enable the Government to measure the performance of the FEA Board. The KPIs were included as part of FEA’s Statement of Corporate Intent (SCI) for 2009. The actual achievement of the KPIs is detailed below:
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FEA Board Members and FEA’s Project Director for Nadarivatu inside the tunnel that is being constructed for the Nadarivatu Hydro Power Project, during a site visit in 2009.
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Nausori and Komo Park substations have been completed up
to 51% and 55% respectively according to the work plan. The
projects will be fully completed before the end of 2010.
The 9.3 MW wood-fired co-generation plant of Tropik Woods
at its Drasa mills was commissioned in May 2008 and was
generating power until April 2009. Unfortunately the power
plant suffered a major failure of its boilers in April 2009 and
has not been operational since then.
FEA’s plans for increased participation of independent power
producers (IPP) in the electricity generation industry are also
progressing well. On 5th February 2009, FEA signed a power
purchase agreement with Pacific Renewable Energy Ltd for a
18 MW wood-fired biomass power station near Vuda Point.
On 26th August 2009, FEA signed a second power purchase
agreement with Iviti Renewable Development for a 10MW
waste-to-energy plant near Sigatoka.
Adetailed“FEAPowerSystemSecurityPlan2009to2014”
was submitted to the Minister for Public Utilities and to the
MinisterforPublicEnterpriseson27thAugust2009basedon
FEA’s long-term Power Development Plan.
Productivity ImprovementsFEA has achieved significant productivity improvements
since 2000. The number of employees has been reduced by
33%, from 960 in 2000 to 643 in 2009, at a time when:
• Numberofcustomersincreasedby25.7%,from117,315
in2000to147,419in2009;
• Generationoutputincreasedby48%,from523giga-
watthoursin2000to777giga-watthoursin2009;
• Lengthofpowerlinesandundergroundcablesincreased
by21%,from7,124kmin2000to8,600kmin2009;
• Totalassetsincreasedby86%,from$473millionin2000
to $880 million in 2009; and
• Totalshareholderfundsincreasedby27%,from$316
million in 2000 to $402 million in 2009.
As a result, the following productivity improvements have
been achieved between 2000 and 2009:
• Customersperemployeeincreasedby88%;
• Generationoutputperemployeeincreasedby120%;
• Lengthofpowerlinesandundergroundcablesper
employee increased by 80%; and
• Assetvalueperemployeeincreasedby178%.
AcknowledgementI would like to convey my sincere appreciation and thanks to
the fellow Board Members for their continuous support and
contributions throughout the year. Their commitment and
direction was instrumental in ensuring that FEA remained
focused and on-track to achieve its strategic objectives. My
special thanks to Mr Ravendra Maharaj, who left our Board
in May 2009, for the constructive contribution made to FEA
during his term. I also welcome Mr Bhuwan Dutt to our Board.
I would like to thank the Cabinet, especially the Hon. Minister
for Works, Transport & Public Utilities and the Hon. Minister
for Public Enterprises, for the invaluable support provided to
FEA during the year.
I also record my sincere thanks to the Commerce Commission
for their understanding of FEA’s difficult position and
approving the implementation of the tariff increase from 1st
September 2009.
To our valued customers, we will continue to explore and
implement ways in which we can further improve our
services to meet or exceed your expectations.
To our Management Team and employees, I am highly
appreciative of your support and contribution during the
year. The level of dedication and commitment that you
and our outsourced service providers showed throughout
the year has enabled us to energise our nation under very
challenging conditions.
Nizam-Ud-Dean
Chairman
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Construction of the Nadarivatu Hydro Power Project progressed positively in 2009 with approximately 10% of the project work completed. The project is expected to be fully commissioned in August 2011 and generate about 101 million units of electricity in a normal hydro inflow year.
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Acknowledgement2009 was a year when FEA took a major step towards
achieving its stated renewable energy target of generating
90% of its total demand through renewable energy sources
by commencing the construction of the Nadarivatu Hydro
Project.
On another note, 2009 was a challenging year with floods
in January, devaluation of the Fiji dollar in April, escalating
fuel prices experienced during the year and finally, the year
ended with Cyclone Mick.
I thank the Chairman and the Board of Directors for their
valuable guidance and constructive support to ensure we
faced these adversities with diligence.
I wish to record my thanks and appreciation to my
colleagues in the Executive Management team and to all the
employees of our organisation and other external service
providers for their continuing support, dedication and
patience.
I also record my sincere thanks and appreciation to the
Prime Minister and his Cabinet Ministers, Permanent
Secretaries and Government officials, the Reserve Bank
of Fiji, the Commerce Commission, Fiji Islands Revenue &
Customs Authority and Trade Union executives for their kind
understanding and cooperation.
Your invaluable contribution made it easier for FEA to rise
above the challenges faced during the year and perform
exceptionally well.
I look forward to your continued support in delivering
increased value to our Shareholder and Stakeholders in the
coming year.
Hasmukh Patel
Chief Executive Officer
FEA made significant
progress towards achieving
its renewable energy
strategy, by progressing the
construction of Nadarivatu
Hydro Power Project,
which is about 10 percent
complete at the end of
2009. FEA has developed a
comprehensive renewable
power development plan
to ensure future demands
for electricity are met to the
required standards of quality,
reliability and safety. The
total investment required
over the next five years is
estimated to be in excess of
F$500 million. Therefore FEA
needs all the support it can
get from the Government
and private investors to meet
the planned investment
programme. FEA has
developed strategies to
achieve the investment
programme, which will
be discussed with the
Government and other
stakeholders during 2010.
Chief Executive Officer
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FEA places very high importance on addressing the concerns of its customers. FEA Customer Service Representatives provide services to customers on a daily basis at all major locations.
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Customers
Customer ServiceThe number of customer accounts increased by 3.8 per cent,
from142,038inDecember2008to147,419inDecember2009.
However, the demand for electricity reduced by 0.45 per cent,
from718.4millionunitsin2008to715.2millionunitsin2009
due to the flood in January and cyclone Mick in December.
The Contact Centre continued to perform quite satisfactorily
and met its Grade of Service targets for most of the year
despite two major unplanned events being the severe
flooding in January and Cyclone Mick in December. The
concept of locating Contact Centre staff at both, FEA’s National
Control Centre in Vuda and the main Contact Centre in Suva,
worked out to be cost effective as well as providing better
customer services.
Tebbutt Research, an independent market research company,
undertook the 2009 customer survey to determine customer
satisfaction on FEA’s performance. Similar to 2008, the 2009
survey measured the overall satisfaction level of the customers
and perceived performance level on six key service areas;
Time to Reconnect, Keeping Supply On, Speed of Fixing Faults,
Keeping Customers Informed, Meter Reading and Billing.
The results from Tebbutt Research indicated that the overall
customersatisfactionlevelincreasedfrom69%in2008to71%
in 2009 for Residential customer category and from 69% to
74%in2009forCommercialcustomercategory.
The survey also indicated that the customer service
performance level of each of the six key service areas
improved in 2009 for Residential customer category, compared
to 2008. However, the performance level for Commercial
customer category has decreased from 2008 to 2009. This
finding is inconsistent with the overall customer satisfaction
levelwhichhasincreasedfrom69%to74%in2009forthe
same Commercial customer category.
Whilst FEA is pleased with the improvement in its overall
customer satisfaction level, it wishes to continually improve its
level of service to customers. Accordingly, it has put in place
appropriate action plans to address the areas for improvement
highlighted in the survey. In the meantime, FEA is also
investigating how it could improve the reliability of customer
survey in future years to obtain more consistent results.
Prepayment MetersThe focus in 2009 for prepayment meters was to replace
theoldCashpowerprepaymentmeters.Atotalof1,769
Review of 2009 Cashpower meters were replaced in 2009. The program for
the installation of prepayment meters will continue in 2010
with the planned installation of a further 5,000 meters.
With the installation of prepayment meters moving into
the interior of Viti Levu, system replication has become
more difficult due to communication issues. FEA is currently
investigating technology that will enable the purchase of
electricity tokens via mobile phones. This technology will
make the purchase of electricity tokens much simpler and
customer friendly.
Product AwarenessElectrical safety, vegetation management and energy saving
tips continued to be the main focus in FEA’s customer
communication activities during the year. FEA made full use
of its billing network to maximize the exposure of its safety
messages, by printing messages on the power bill itself and
by inserting brochures with the power bills. FEA also assisted
the Ministry of Energy in its Energy Savings campaign
by inserting its brochures in FEA’s power bills. Television
interviews and participation in radio talk-back shows were
also used for creating public awareness.
In addition, presentations were made in October 2009 to
FEA’s top Business customers in the Central and Western
Divisions to create strong awareness of the low water level in
Monasavu and the need to conserve energy. The customers
were also requested to assist FEA by running their own diesel
generators to enable FEA to conserve water at its Monasavu
reservoir. The message was well received and FEA is grateful
to its major customers for the assistance provided to FEA.
In order to improve customer service, FEA partnered with
the Consumer Council of Fiji to visit rural communities in
the Western Division, from Sigatoka to Rakiraki. The team
also visited the Northern Division, visiting schools and local
communities in Savusavu, Labasa and Seaqaqa. FEA plans
to expand the program in 2010 to all communities in the
Central Division.
Demand Side ManagementFEA continues to assist its customers become more energy
efficient, by providing technical advice and billing data to
those customers who request for such data. In 2009, the
Demand Side Management Team of FEA completed two
energy audits, for the Naboro Prison Complex and Tanoa
Plaza Hotel in Suva. The report provided these two customers
with an in-depth knowledge of their energy consumption
trends and gave detailed recommendations on how they
could reduce their energy consumptions. The FEA also
worked closely with the Ministry of Energy providing advice
on what to include in the Ministry’s brochures on energy
savings that were sent out to customers showing electricity
consumption trends and gave detailed recommendations
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on how they could reduce their energy consumptions. FEA
also visited several schools in the Central Division making
presentations on Energy Savings and Electrical Safety.
In September 2009, FEA completed the metering of ten key
substations to enable the monitoring of energy supplied
from these substations and provide data for energy audit of
the Network distribution system. This metering program will
continue in 2010 for the metering of additional substations.
Electricity Tariff & Fuel SurchargeThe tariff increase of 15% approved by the Cabinet and
the Commerce Commission was implemented from 1st
September 2009. There were no increases for Life-line
residential customers, street lighting and Institutions who
consume less than 250 units of electricity per month.
Therefore the tariff increase for the residential customer
category was only 4% on average. From 11 March 2009, FEA
ceased to apply the Fuel Surcharge Framework, which had
been in place from September 2006, as approved by the
Commerce Commission.
Staff, Industrial Relationsand Health Safety & Environment
Staff Numbers2009 brought many challenges in relation to the human
resource capabilities of FEA. There were two natural disasters
experienced during the year, the severe flooding in January
and Cyclone Mick in December. The two natural disasters
caused extensive damage to our power system and the
restoration works that followed to restore power as quickly
as possible stretched our human resource capacity to its
utmost limit. Our employees were again called to rise to the
challenge, which they did with commitment and loyalty.
Our employees sacrificed valuable time with their families,
especially during the December festive season, to ensure that
power supply was restored to all our customers as soon as
practical.
Through this experience, FEA recognized that there is a need
to review and rebuild the human resource capacity of the
organization to ensure that we have the right number of
staff with the right competencies to respond to FEA’s future
challenges. In this regard, FEA reviewed its organization
structure and the staff numbers in May, and again in October,
2009. Subsequently the Board approved a new organization
structure with an appropriate increase in the overall staff
number.
During 2009, FEA continued to lose highly skilled and
experienced employees who have either found better
opportunities locally or migrated overseas to greener
pastures. FEA started the year with 649 employees, but ended
the year with only 643 employees.
Staff turnover continue to be a major risk for FEA. Strategies
have been implemented to ensure minimum staff turnover
in future through continuation of our human resource
development programmes such as succession planning,
management development programmes, leadership
programmes, apprenticeship and the trainee line-mechanics
programme.
Staff Training144 Training programmes were conducted in 2009 for the
developmentofouremployees.Ofthese,97programmes
wereconductedin-housebytheFEATrainingTeamwhile47
programmes were conducted by external training providers.
All the members of the Training team for the first time were
registered by TPAF as registered Training Instructors and
Training Officers.
The 13 current live-line workers underwent the 132kV High
Voltage Live-line refresher training in 2009. Three trainee
system controllers successfully completed their training and
have been upgraded to System Controllers.
Sponsorship of employees to pursue Bachelor of Engineering
degree courses in Electrical & Mechanical Engineering at
the Auckland University of Technology (AUT) continued
in 2009.One employee who underwent the programme in
2007graduatedinDecember2009andhasre-joinedthe
workforce as a Graduate Mechanical Engineer.
Employees continue to be sponsored to undergo Diploma
and Advanced Diploma programmes in Electrical and
Mechanical Engineering at the Fiji Institute of Technology
(FIT). In 2009, a total of seven employees were sponsored
to undertake full time studies towards their diploma and
advanced diploma programmes at FIT.
FEA continued to support and engage Industrial student
attachments from the various institutions of Fiji in 2009.
Apart from the above training programmes, staff also
continued with their own development programmes in
the various areas of their interest which include Diplomas,
Advanced Diplomas, Degrees and Post Graduate studies.
Succession Planning and Staff DevelopmentWith the succession planning framework in place, the
Executive Management Team identified a pool of talented
Departmental Managers to be trained and groomed as
future General Managers. A pool of Team Leaders was also
identified as potential Departmental Managers. Training and
development opportunities for these Managers have been
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identified and is being implemented to prepare them for
future managerial and leadership positions.
Furthermore for the newly appointed General Managers
and identified potential General Managers, management
development programmes which focused at improving
leadership and management competencies have been
developed and will be implemented in 2010.
Inculcating FEA ValuesFEA continued to place great importance on inculcating
its core values to all its employees, as part of its Mission
Statement. The Employee Code of Conduct which places
great importance and emphasis on the FEA Values is
now included as part of the employee’s conditions of
employment.
Industrial RelationsFEA’s Industrial Relations Strategies for 2009 were focused
at ensuring compliance with the requirements of the
Employment Relation Promulgation. This determines
our negotiation strategy with the trade unions and our
focus targeted at negotiating alignment of the terms and
conditions of employment amongst the same group of
employees.
We were able to successfully negotiate the 2008 Log of
Claims with two of the three trade unions and negotiations
are continuing with the remaining trade union.
We were also successful in signing an agreement on the
Performance Management System Framework with all the
trade unions.
Relationship between FEA and the three trade unions
continued to remain cordial and improved throughout the
year. FEA is pleased that no new issues have been reported
by any of the trade unions to the Ministry of Labour during
the year.
Health, Safety and EnvironmentFEA is committed to support a total Health, Safety and
Environmental (HSE) improvement culture where all
employees have the necessary tools, methods and personal
attributes to actively care for their safety, the safety of their
co-workers, members of the public and the environment.
This commitment and drive, led by the Board and the
Executive Management, ensured that FEA is bench-marked
against international best practice levels in terms of its safety
performance. However, FEA is totally focused on a continuous
improvement culture to achieve the ultimate goal, which is
“SafeProduction,ZeroIncidents”.
Defensive driver training courses were conducted during the
year for all of FEA’s authorised drivers.
FEA’s internal HSE Management System was also rolled out to
FEA’s external electrical contractors to ensure that they meet
the minimum legislative requirements and comply with FEA’s
policies and standards.
A rigorous hazard identification and corrective/improvement
action register continued to be maintained and monitored
internally. HSE System Awareness Training and Inductions
were conducted for new employees. The HSE committees
continue to fulfill an important role by performing their
functions effectively. A total of thirty four near-misses,
incidents and accidents were investigated by the HSE team
and recommendations were tabled and registered for
remedial action.
Health presentations and basic medical examinations were
conducted in 2009 to establish the health risk profiles of FEA
employees and raise awareness and implement preventative
measures with regards to non-communicable diseases. A
concerted focus on health and well-being will continue in
2010 to educate and empower the workers to take more
responsibility for maintaining optimum health.
Production
Water ManagementThe storage level of the Monasavu lake at the beginning
of2009wasatacriticallevelof723metresabovemean
sea level (AMSL), which was just eight metres above the
minimumsafeoperatinglevelof715metres.
Heavy rainfall and flooding in January 2009 helped to
increasethestoragelevelby19.2metresto742.2metres
AMSL, just 2.8 metres below the maximum storage level.
Below-average rainfall from February to November 2009,
(except for July and September), caused the water level
atMonasavutofalltoacriticallowlevelofjustabove720
metres AMSL, and FEA was compelled to reduce the level
of hydro generation from Wailoa and replace it with more
expensive thermal fuel. FEA had no other option but also
to inform its customers of a potential power shortage
situation. FEA’s request for its customers to minimise the
power consumption, combined with initiatives taken by large
customers to run their own diesel generator sets until the
situation improves, helped to avoid power shortages in 2009.
Heavy rainfall during Cyclone Mick in mid December 2009
helpedincreasethestoragelevelto732metresAMSLatthe
end of the year.
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FEA faced severe flooding in January and Cyclone Mick in December causing extensive damage to the power system infrastructure around the country and putting FEA in a state of emergency to restore power supply as quickly and safely as possible to its customers.
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HYDRO-DIESEL GENERATION MIX
MONASAvu DAM STORAGE LEvEL
2009 RAINFALL COMPARED WITH PAST YEARS
Rain
fall
(mm
)
Total rainfall in 2009 was 5,328 mm due to floods in January
and Cyclone Mick in December, compared with 5,320 mm in
2008. The lowest ever rainfall recorded is 3,540 mm in 2004.
The average generation mix for 2009 was 58 per cent hydro,
25 per cent diesel, 14 percent heavy fuel oil, 1 per cent wind
with the other 2 per cent provided by the Independent
Power Producers (IPPs), Tropik Woods and Fiji Sugar
Corporation. In comparison, 62.1 per cent was generated
from hydro in 2008, 21.2 per cent from diesel, 12.6 per cent
heavy fuel oil, 0.6 per cent from wind with the other 3.5 per
cent from Tropik Woods and Fiji Sugar Corporation.
Per
cen
t
Dam
Lev
el m
etrr
es a
bove
MSL
Wailoa power station generated 436 Giga Watt-hours (GWh)
in 2009 and Wainikasou power station, situated upstream of
the Monasavu dam, generated 16 GWh.
MONTHLY GENERATION MIX (GWH)80
70
60
50
40
30
20
10
0Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
FEA Thermal OtherFEA Hydro
1600
1400
1000
800
600
400
200
0Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Average past 28 Yrs2009
1990
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
100
90
80
70
60
50
40
30
20
10
0
ThermalHydro & IPP
750
745
740
735
730
725
720
715
710
705
700
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Butoni wind farm performed well in 2009 with a total
generationoutputof7.2millionunitsofelectricity.Although
Tropik’s 9.3 MW wood-fired co-generation plant at its Drasa
timber mill had been operational from May 2008, the power
plant suffered a major failure of its boiler in April 2009 and
has not been in operation since that time. Since the hydro
level was not at a satisfactory level until December 2009,
FEA replaced the short fall from the Tropik Woods non
generation by burning expensive thermal fuel.
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Because of the inherent danger in dealing with electricity, extensive education and training are essential to ensure the safety of FEA workers. Safety training is essential to the operation of the FEA as illustrated above.
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Power System ReliabilityThree internationally accepted performance indicators are
used each year to measure FEA’s power system reliability:
• Theaveragetotallengthoftimethatacustomeris
without power over a year is measured by the System
Average Interruption Duration Index (SAIDI). This has
improved by 49 per cent, from 1,810 minutes in 2008 to
920 minutes in 2009.
• Theaveragenumberoftimesthatacustomer’spower
supply is interrupted in a year is measured by the System
Average Interruption Frequency Index (SAIFI). This index
improved from 25.6 times in 2008 to 15.6 times in 2009.
• Theaveragetimethatacustomeriswithoutpower
per-interruption is measured by the Customer Average
Interruption Duration Index (CAIDI). This index improved
from71minutesin2008to59minutesin2009.
The main reasons for the power interruptions that occurred
in 2009 were:
• Plannedmaintenanceworksonoverheadlinesand
underground cable (55 per cent)
• Naturaldisasterse.g.flood,lightning,cyclone,etc.(10per
cent)
• Faultsonpowerlinehardware(29percent)and
• Vegetationinterferingwithpowerlines(6percent)
FEA intends to find permanent solutions to the causes of
power outages in order to improve the reliability of power
supply to be in-line with best performing international utility
benchmarks of similar size.
The initiatives FEA is currently progressing include:
• Live-linemaintenanceofitspowerlinesatallvoltage
levels;
• Effectivevegetationmanagementprogram;
• Useofappropriatetechnologytodetectdefectsthatcan
be fixed on time and equipment that can restore power
supply quickly; and
• Ensuringthatadequatesupplycapacityisavailableto
meet the demand for electricity at all times.
The intensive vegetation management work carried out over
the last few years has seen unplanned controllable power
outages resulting from interfering vegetation reduced
substantially. This work needs to continue on an on-going
basis on all key power lines because vegetation re-growth
is occurring at an alarming pace around power lines due to
favourable climatic conditions.
Better and more-effective marketing campaigns will be
carried out to ensure customers stop planting trees close to
FEA’s power lines.
Financial Performance
ProfitabilityFEA made a financial profit of $2.4 million after tax in 2009,
after booking an unrealized foreign exchange loss of $5.3
million arising from the devaluation of Fiji dollar in April 2009.
This equates to a Return on Shareholder Funds (ROSF) of
positive 0.6%.
This result was achieved despite two unplanned contingency
events that impacted the financial performance in 2009
by $5.2 million – severe floods in January 2009 incurred
additional costs of $1.1 million and Cyclone Mick in
December 2009 incurred additional costs of $2.1 million and
lost revenue of $2 million.
Thefinancialprofitaftertaxwouldhavebeen$7.7million
if adjusted for the unrealised foreign exchange loss of $5.3
million that impacted the financial performance in 2009. This
equates to a Return on Shareholder Funds of positive 2.0%.
The accounting standards require such unrealised foreign
exchange losses to be taken directly to the Profit and Loss.
Earnings before interest, tax, depreciation and amortization
(EBITDA)for2009were$37.6million.Thisprovidedan
EBITDAnetinterestcoverageratioof4.78times.Ifthe$5.3
million unrealised foreign exchange losses were not incurred
by FEA, the EBITDA would have been $42.9 million and results
in a net interest coverage ratio of 5.46 times.
ELECTRICITY SALES vOLuME
2001 2002 2003 2004 2005 2006 2007 2008 2009
800
700
600
500
400
300
200
100
-
Residential Commercial Industrial
GW
h
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The total operating expenses of FEA excluding fuel costs and
depreciation was $59.9 million. This has reduced by $0.2
million when compared with the $60.1 million incurred in
2008. This is due to cost cutting measures put in place by
management to combat the devaluation of the Fiji dollar in
April 2009.
The net thermal fuel cost decreased by $11.9 million in 2009,
from$89.2millionin2008to$77.3millionin2009.Thisis
due to lower average fuel price of $1,163 per tonne recorded
in 2009 compared to $1, 681 per tonne in 2008. The thermal
fuel cost accounted for 46.5 per cent of FEA’s total operating
expenses of $166 million in 2009 compared with 50.2 per cent
in 2008.
Depreciation expense increased by $0.3 million in 2009 due
to depreciation for additional assets transferred to the Fixed
Assets Register in 2009.
Net financing costs decreased by $0.5 million in 2009, from
$8.4millionin2008to$7.9millionin2009.Interestcosts
amounting to $11.9 million were capitalised to the capital
projects, compared with $1.8 million capitalised in 2008.
The borrowings include a commercial foreign currency
loan from the China Development Bank amounting to
approximately US$58.8 million. The Fiji Government
guarantees FEA’s loans and the guarantee fees incurred in
2009 was $0.9 million.
Revenue from electricity sales for 2009 was $169.0 million
compared to $159.4 million in 2008, an increase of $9.6
million. This is due to the implementation of the 15 per cent
electricity tariff increase with effect from 1st September
2009.
Other operating revenue of $10.6 million in 2009 was lower
by $13.8 million compared to the $24.4 million earned in
2008. One reason for the decrease in 2009 is due to the
decrease in fuel surcharge revenue by $16.6 million, due to
instructions from the Commerce Commission to put the fuel
surcharge framework on hold from 11th March 2009.
The Monasavu hydro reservoir continued to be affected by low water inflows in 2009 due to the El Nino weather pattern, resulting in prolonged spell of dry weather around the catchment area. The Monasavu Hydro Scheme assists FEA to produce cheap energy compared to expensive diesel fuel.
ELECTRICITY SALES REvENuE
2001 2002 2003 2004 2005 2006 2007 2008 2009
180
160
140
120
100
80
60
40
20
-
Commercial IndustrialResidential
F$ m
illio
ns
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A net income tax benefit of $1.52 million has been
recognised in FEA’s financial statements for 2009 and is
due to net tax benefits resulting from the effect of reduced
corporate tax rate from 29% in 2009 to 28% in 2010 on
deferred tax liability and future income tax benefit carried on
FEA’s Balance Sheet.
Electricity generated from the thermal power stations
increased by 40 GWh in 2009. The increase is due to Tropik
Woods plant failure to generate from April 2009 and the
deteriorating water level at Monasavu.
The total hydro generation decreased from 495 GWh in 2008
to 460 GWh in 2009, requiring increased generation using
expensive thermal fuel. The Wailoa hydro power station
generated 436 GWh in 2009, lower than the 463 GWh it
generated in 2008. Total quantity of diesel burn in 2009 was
41,763tonnesandHeavyFuelOil(HFO)burnwas24,646
tonnes, aggregating to 66,409 tonnes. In comparison, the
total quantity of diesel burn in 2008 was 38,112 tonnes and
HFO burn was 21,096 tonnes, aggregating to 59,208 tonnes.
Thisisanincreaseof7,201tonnesin2009.
Financial StrengthThe financial position of FEA remained strong throughout
2009. FEA’s gearing ratio, as measured by Debt to Debt plus
CapitalandReserves,was39.76%asat31stDecember2009,
well within the international benchmark for power utilities of
about 45%. The shareholder value of FEA was $402 million as
at the end of 2009, increased from $384.5 million at the end
of 2008 and $325 million at the end of 2002. FEA’s total assets
wereworth$880.3million,asubstantialincreasefrom$737.7
millionin2008and$457millionin2002.Thisindicatesthat
FEA has added significant value to its shareholder, the Fiji
Government, since the start of the reform process in 2002.
Reduction of the corporate income tax rate from the current
29% in 2009 to 28% in 2010 required the Deferred Tax
Liability and Future Income Tax Benefit carried on FEA’s
Balance Sheet to be re-stated. The net income tax effect due
to the adjustments was included in the Income Statement of
FEA, resulting in a net income tax benefit of $1.52 million.
Capital Expenditure & FundingFEA spent $86.88 million on capital expenditures in 2009,
compared with $122 million in 2008. Expenditure on major
projects include $55 million on Nadarivatu, $11 million on
the Network Augmentation projects, $6.5 million on rural
electrification and urban reticulation projects, $8.6 million on
system reinforcement and new connections and $5.8 million
for other routine capital projects.
AUS$70millionloanagreementwassignedon19thJanuary
2009 with China Development Bank to fund the Nadarivatu
renewable hydro power project, and US$58.8 million of
the loan was drawn-down in 2009. The remaining US$11.2
million of the loan will be drawn-down in March 2010. All
the three debt covenants essential to ensure the loan draw-
down in March 2010 were satisfied during 2009.
FEA also rolled over two existing loans with a local
commercial bank amounting to $40 million to ensure
availability of funds to continue with its investment program.
Risk Management and InsuranceFEA continued its emphasis on the application and
implementation of best practice risk management strategies
across its business. An Internal Audit section which is now
headed by an Internal Audit Manager reports all audit issues
directly to the Chief Executive Officer and the Board Audit
and Finance Sub-Committee.
During the year, FEA’s business risks improved by one level
or more for seven out of a total of 11 top business risks. FEA
also continued with the external Riscore Programme at its
main critical sites at the Wailoa Power Station, Kinoya Power
Station, Labasa Power Station, Vuda Power Station and the
National Control Centre in its quest to manage the risks at
these critical power facilities. The improvements in scores
TOTAL DIESEL AND HFO FuEL uSAGE
Tonn
es (‘
000)
HFODiesel
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
90
80
70
60
50
40
30
20
10
-
TOTAL DIESEL AND HFO FuEL PRICE
F$ P
er to
nne
HFODiesel
2200
2000
1800
1600
1400
1200
1000
800
600
400
200
0
Dec
02
Apr
03
Aug
03
Dec
03
Apr
04
Aug
04
Dec
04
Apr
05
Aug
05
Dec
05
Apr
06
Aug
06
Dec
06
Apr
07
Aug
07
Dec
07
Apr
08
Aug
08
Dec
08
Apr
09
Aug
09
Dec
09
The average price of diesel (partial duty concession) was
$1, 234 per tonne in 2009 compared to $1,681 per tonne
in 2008. The diesel price peaked at $1, 499 per tonne in
December 2009. The average price for HFO (partial duty
concession) was $993 per tonne in 2009 compared with
$1,189 per tonne in 2008.
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To avoid soil erosion occuring in remote locations where high voltage transmission towers are located, FEA, with assistance from the Land Owners, are planting Vertiver Grass around the Transmission Tower areas.
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for the five sites range from 3% to 6%. FEA also continued
with its internal risk audit and the results have also been very
positive.
In September 2009, FEA renewed its main insurance
programme for another year after the insurers were satisfied
with FEA’s business operations, including the level of
maintenance of the assets and the controls that are in place
to minimize or mitigate the risks.
FEA worked closely with the National Fire Authority of Fiji
to promote fire safety and reduce fire incidents. Several
buildings were inspected in the Central and Western
Divisions and reports were prepared recommending
improvements to buildings to reduce fire hazards.
Power Development Programme
FEA’s Generation ProjectsIn September 2008, a contract to construct the 40MW
Nadarivatu Renewable Hydro Power Project was awarded
to Sinohydro Corporation Limited of China. When
commissioned in August 2011, the renewable generation
output from the power station will greatly assist FEA to move
towards achieving its renewable energy target of 90% from
renewable resources by 2011.
Detailed designs for weir, tunnel and power station for the
power project have been approved. Construction work on
the tunnel and weir structure commenced in October 2009
and construction work for the power station commenced in
December 2009. Approximately 10% of the project work has
been completed at the end of 2009.
Tenders for a consultant to assist in the application to obtain
approval for carbon credits for the project under the Clean
Development Mechanism were closed and a contract to
prepare the Project Design Document will be issued in early
2010.
Expressions of interest for power development at Salt Lake,
Savusavu, using tidal energy was advertised and will close in
early 2010.
FEA, with the assistance of Japanese Bank for International
Co-operation (JBIC), completed feasibility studies to identify
additional power generation opportunities downstream
of the Monasavu Hydro Power scheme, using the water
outflows from the existing hydro power station at Wailoa.
Tenders for the project to raise the weir height at
Wainisavulevu were evaluated during the year. However the
project was put on hold subject to unavailability of funds.
Augmentation of the Transmission Grid The Network Augmentation Project for construction of five
33kV/11kVZoneSubstationsatNatadola(toprovidesupply
to Intercontinental Hotel at Natadola), Komo Park, Nausori,
Kinoya and Qeleloa was awarded to Tenix Alliance of New
Zealandin2008.
The Natadola Substation was commissioned in April 2009.
The equipment installation works for Qeleloa and Kinoya
were completed in 2009 and the two substations are
undergoing acceptance testing. Commissioning is expected
to commence in the 1st Quarter of 2010. Construction
work on the Komo Park and Nausori Substation progressed
satisfactorily and 50% of the projects have been completed
at the end of 2009. The two substations are scheduled to be
commissioned by end of 2010.
Tender document for second high voltage132kV transmission
line to supplement the existing 132 kV line was completed
through a technical assistance grant received from the Asian
Development Bank (ADB). Tenders for construction will be
called in 2010.
Independent Power ProducersFEA continues to encourage Independent Power Producers
(IPPs) to enter Fiji’s electricity generation sector.
The existing 9.3MW wood-fired co-generation plant of Tropik
Woods at its Drasa timber mill generated power until March
2009. Unfortunately, a major failure of its boiler forced the
power station to shut down, and has not been operational
since then.
On 5th February 2009 FEA signed a power purchase
agreement with a new IPP, Pacific Renewable Energy Ltd, for a
18MW wood-fired biomass Power Station near Vuda.
On 26th August 2009, FEA signed a power purchase
agreement with another new IPP, Iviti Renewable
Development Ltd, for a 10MW waste-to-energy plant near
Sigatoka.
Improvement of the Current NetworkIn order to improve power system performance, Capacitor
Banks were installed at Rakiraki and Korovou. These
Capacitor Banks will reduce the use of diesel generation at
these stations whilst improving the performance level of the
power system .
At Sigatoka, new 33kV feeders were commissioned with
new protection relays to improve the reliability of existing
network.
In 2009 FEA experimented the planting of Vertiver Grass at
Waibau in Naitasiri where high voltage towers are located.
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Work on the $34 million major projects to augment FEA’s transmission network progressed according to the work plan with the construction of Qeleloa and Kinoya substations in 2009.
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From this experiment, it was observed that without the use
of Vertiver grass, 50 tonnes of soil/ha/year was washed away
by torrential rain and led to substantial land degradation and
landslides. With the use of vertiver grass, this problem was
significantly reduced by 98%. In this case, 1 tonne of soil/ha/
year managed to wash away through the walls of Vertiver
grass. This helped to avoid soil erosion and landslide at the
transmission tower area.
Other ImprovementsThe SCADA master station at the National Control Centre
in Vuda was upgraded to receive more information from
the power system, especially from the Northern Division.
Together with this, an Uninterrupted Power Supply (UPS) unit
was installed to maintain integrity of the power supply to the
computers in events of major blackouts.
To increase the reliability of the current 132kV transmission
network, a protection relay upgrade project was undertaken
and the design works have been completed. The project is
expected to be completed in 2010.
Information & Communication Technology
ArobustICTsystemperformancelevelof99.756%was
achieved in 2009, very close to international best practice of
99.999%. This was complemented by commissioning a Disaster
Recovery Centre at FEA’s Kinoya Power Station premises, for
supporting continuous operation of 4 critical business systems:
• Navision(FinancialAccountingSystem)
• Gentrack(ElectricityBillingSystem)
• HumanResourceInformationSystem(HRIS)
• E-mailSystem(MicrosoftExchange)
To pave the way for continuous operations, IT Infrastructure
was upgraded to IBM Blade Servers with Storage Area Network
(SAN) for server consolidation and virtualizing the operating
environment using VMware. This will provide improved data
security, flexibility, and reliability in addition to high-availability
and continuous operation.
To Improve information security of ICT systems, FEA installed &
commissioned:
• Gatewayfirewallusingthestate-of-the-artCiscoASA5500
including content filtering
• End-PointSecuritysystemusingSophosAntiVirusSystem.
These will greatly enhance the cost-effective management of
Network security threats and vulnerabilities which are ever
increasing.
FEA was granted a Telecommunications License by the
Ministry of Information and began leasing out a pair of dark
optic fibres between Suva and Vuda to Telecom Fiji Limited.
Furthermore, in order to maximize the use of the optical
fibre cables installed and commissioned in 2008 between
the Central Division and the Western Division, all major
substations of FEA have now been transferred to use the Fibre
network. The SCADA controls from National Control Centre
at Vuda have also been made operational using Fibre as the
primary medium of communications. This will significantly
improve the reliability of FEA’s operations and will provide a
secure communication network.
Three backup diesel generators were installed at FEA’s
Radio Repeater sites in Viti Levu to improve the disaster
recovery capability. This has greatly improved the radio
communications of FEA, particularly during natural disasters
when these sites become inaccessible.
Corporate Services
Supply Chain FEA continued to focus on optimizing its performance
in its critical result areas of inventory management and
procurement of goods & services by following simple key
operational objectives;
• IncreaseSpeed
• ImproveQuality
• ReduceCosts
FEAachievedastockholdinglevelof$11.7millionatthe
end of 2009, against a target of maximum $13 million, due
to sound Inventory management practices and vigilance.
Stock-turns achievement was 14.3 per cent against a target
of minimum 6 per cent. This ensured that FEA’s stock control
and usage has been optimum, and contributed to significant
savings in FEA’s working capital.
In terms of tendering, the average tender turnaround
time target of 6 weeks was accomplished for the year. In
addition, savings of around $1.04 million derived via tender
negotiations and other supply chain initiatives enhanced FEA’s
financial performance.
RegulatoryThe technical regulation and enforcement of the Electricity Act
for the Electricity Industry in Fiji falls under the responsibility
of the Regulatory arm of FEA. The responsibilities of this Unit
include:
• registrationandlicensingofelectricians&electrical
contractors
• ensuringindustrycompliance,inaccordancewiththe
ElectricityActandAS/NZSWiringstandards
• theapprovalofimportedelectricalappliancesandfittings
used in Fiji
• licensingofnewIndependentPowerProducers(IPPs)
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FEA workers work continuously around the clock to ensure minimum power disruptions to customers. FEA tradesmen are seen here repairing faulty under-ground cable.
A thorough exercise in validation of the licensing fees revenue
and practicing license holders revealed that registered
licensedelectricianshadincreasedsignificantlyto1,748in
2009 whilst registered licensed electrical contractors had
decreasedto273attheendof2009.
FEA had a target of fixing 90 per cent of the power line faults
in urban areas within 3 hours and for rural areas within 4
hours. It achieved 95% for rural customers and 92 per cent for
urbancustomersin2009.Atotalof4,487newconnections
weremadein2009ofwhich3,872werefordomestic
customers and 615 commercial customers.
The number of fatalities due to electrocution in 2009 has
reduced by 50 per cent, from six electrocutions in 2008 to
three in 2009. FEA is pleased that its focus on Public Electricity
Safety awareness programs is starting to get positive
outcomes.
FEA fully supports the proposed transfer of the Regulatory
function that it currently administers to an independent
entity within the Government. In order to facilitate and
expedite this transfer, the Regulatory Unit has been ring-
fenced within FEA’s organisation structure for the last two
years. During 2009, FEA held several meetings with the
Government on their plans and possible timelines for the
transfer.
In addition, FEA attended the East Asia Pacific Infrastructure
Forum (EAPIRF) conference and Knowledge Sharing
Workshopsfrom19th-27thNovember2009inVietnam,
to gain knowledge on the multi-sector model that was
previously advocated by the Government.
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Statement by Members of the Authority 30
Independent Audit Report 31
Statement of Comprehensive Income 32
Statement of Financial Position 33
Statement of Cash Flow 34
Statement of changes in Capital and Reserves 35
Notes to and forming part of the Financial Statements 36-58
FINANCIAl STATEMENTS
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STATEMENT BY MEMBERS OF THE AUTHORITYFOR THE YEAR ENDED 31 DECEMBER 2009
In accordance with a resolution of the Members of the Fiji Electricity Authority, in the opinion of the Members:
1. the financial statements and accompanying notes show a true and fair view of the financial position, results of
operations, changes in capital and reserves and cash flows of the Fiji Electricity Authority as at and for the year
ended 31 December 2009.
2. the statements have been prepared in accordance with the provisions of the Electricity Act 1966 (Cap 180) and
International Financial Reporting Standards.
3. the basis of preparation of the financial statements and the classification and carrying amounts of assets and
liabilities as stated in these financial statements are appropriate.
25 May 2010, Suva
Nizam-ud-Dean Gardiner Whiteside
CHAIRMAN DEPUTY CHAIRMAN
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I have audited the accompanying financial statements of Fiji Electricity Authority (Authority), which comprise the statement of
financial position as at 31 December 2009, and the statement of comprehensive income, statement of changes in capital and
reserves and statement of cash flow for the year ended, and a summary of significant accounting policies and other explanatory
information as set out on pages 32 to 58.
Directors’ and Management’s Responsibility for the Financial Statements
Directors and Management are responsible for the preparation and fair presentation of these financial statements in accordance
with International Financial Reporting Standards and the requirements of the Electricity Act 1966. This responsibility includes:
designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial
statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate
accounting policies; and making accounting estimates that are reasonable in the circumstances.
Auditor’s Responsibility
My responsibility is to express an opinion on these financial statements based on my audit. I have conducted the audit in
accordance with International Standards on Auditing. Those standards require that I comply with ethical requirements and
plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements.
The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of
the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control
relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s
internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of
accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
I believe that the audit evidence that I have obtained is sufficient and appropriate to provide a basis for my audit opinion.
Audit Opinion
In my opinion:
a) proper books of account have been kept by the Fiji Electricity Authority, so far as it appears from my examination of
those books, and
b) the accompanying financial statements which have been prepared in accordance with International Financial
Reporting Standards:
(i) are in agreement with the books of accounts;
(ii) to the best of my information and according to the explanations given to me:
a) give a true and fair view of the state of affairs of the Fiji Electricity Authority as at 31 December 2009 and of the
results, movement in reserves and cash flows of the Authority for the year ended on that date; and
b) give the information required by the Electricity Act 1966 (Cap 180) in the manner so required.
I have obtained all the information and explanations which, to the best of my knowledge and belief, were necessary for the
purposes of my audit.
Suva, Fiji Tevita Bolanavanua
25 May 2010 Acting Auditor General
INDEPENDENT AUDIT REPORTFOR THE YEAR ENDED 31 DECEMBER 2009
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Notes 2009 2008 $’000 $’000 Revenue - electricity sales 5 169,049 159,439 Otheroperatingrevenue 5 10,556 24,376 Total revenue 179,605 183,815 Personnelcosts (17,993) (17,310)Fuelcosts (77,270) (89,250)Electricitypurchases (12,027) (12,984)Leaseandrentexpenses (1,721) (1,905)Depreciationonproperty,plantandequipment (28,819) (28,437)Amortisationofintangibleassets (543) (576)Losses due to flooding (1,140) -CycloneMick-Restorationcosts (2,157) -Otheroperatingexpenses (24,315) (27,303) Total expenses (165,985) (177,765) Profit before finance costs, income tax and interest injoint venture 13,620 6,050 Finance Cost Financecost (10,176) (9,371)Interest income 2,309 932Unrealised foreign exchange gain / (loss), net (5,322) 402 Profit / (loss) before income tax and interest injoint venture 6 431 (1,987) Shareofprofitofjointventure 499 717 Profit / (loss) before income tax 930 (1,270) Incometaxbenefit 7(a) 1,515 3,745 Profit after income tax 2,445 2,475 Other comprehensive income - - Total comprehensive income for the year 2,445 2,475
The above statement of comprehensive income has been prepared in accordance with the International Financial Reporting Standards (IFRS) and should be read in conjunction with the accompanying notes.
STATEMENT OF COMPREHENSIVE INCOMEFOR THE YEAR ENDED 31 DECEMBER 2009
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Notes 2009 2008 $’000 $’000 CAPITAL AND RESERVES Retainedprofits 343,097 340,652Capital contribution 58,943 43,901 402,040 384,553 Represented by: CURRENT ASSETS Cash on hand and at bank 36,490 10,029 Heldtomaturityfinancialassets 14(b) 57,859 -Receivablesandprepayments 9 27,714 30,295Inventories 10 15,166 14,176Other assets 11 - 409 Loans receivable 13 621 621 Withholding income tax recoverable 330 - 138,180 55,530 NON-CURRENT ASSETS Property,plantandequipment 12 716,537 656,786Loansreceivable 13 9,735 10,357Availableforsalefinancialassets 14(a) 2,270 1,772Intangible assets 15(b) 2,560 1,883 Deferredtaxassets 7(b) 10,997 11,417 742,099 682,215 TOTAL ASSETS 880,279 737,745 CURRENT LIABILITIES Tradeandotherpayables 16 23,638 14,372Provisionforemployeeentitlements 17 1,641 1,817Interest bearing borrowings 18 116,435 40,815 141,714 57,004 NON-CURRENT LIABILITIES Tradeandotherpayables 16 26,927 24,504Provisionforemployeeentitlements 17 5,398 5,769Interest bearing borrowings 18 243,232 202,156 Deferredincome 19 12,419 13,275Deferredtaxliabilities 7(c) 48,549 50,484 336,525 296,188 TOTAL LIABILITIES 478,239 353,192 NET ASSETS 402,040 384,553 The above statement of financial position has been prepared in accordance with the International Financial Reporting Standards (IFRS) and should be read in conjunction with the accompanying notes.
STATEMENT OF FINANCIAL POSITIONAS AT 31 DECEMBER 2009
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Notes 2009 2008 $’000 $’000 Cash flows from operating activities Receiptsfromcustomers 182,763 190,820 Paymentstosuppliersandemployees (124,423) (151,704) Interest received 2,258 941 Interest paid (19,491) (11,183) Insurance proceeds for business interruption 333 - Withholding taxes paid (329) - Net cash flows from operating activities 41,111 28,874 Cash flows from investing activities Acquisition of property, plant and equipment (82,985) (122,313) Acquisition of intangible assets (1,220) - Repayment of advance by joint venture 621 - Payment for investment in short term deposit (54,635) - Proceeds from investment in short term deposit - 5,000 Proceedsfromcapitalcontributionforgeneralextension 14,778 4,748 Proceeds from disposal of plant and equipment 58 199 Net cash flows used in investing activities (123,383) (112,366) Cash flows from financing activities Repaymentofbondsandloans (19,575) (48,031) Proceeds from bonds and loans - local 20,000 103,591 Proceedsfromloans-overseas 112,700 - Net cash flows from financing activities 113,125 55,560 Net increase / (decrease) in cash held 30,853 (27,932)
Effect of exchange rate movement on cash and cash equivalents (3,152) - Cashandcashequivalents-atthebeginningoftheyear 8,789 36,721 Cash and cash equivalents - at the end of the year 8 36,490 8,789 The above statement of cash flow has been prepared in accordance with the International Financial Reporting Standards (IFRS) and should be read in conjunction with the accompanying notes.
STATEMENT OF CASH FLOWFOR THE YEAR ENDED 31 DECEMBER 2009
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STATEMENT OF CHANGES IN CAPITAL AND RESERVESFOR THE YEAR ENDED 31 DECEMBER 2009
Capital Retained Total Contributions Profits $’000 $’000 $’000 Balance as at 31 December 2007 39,492 338,177 377,669
Movement in reserves 4,409 - 4,409 Total comprehensive income for the year ended 31 December 2008 - 2,475 2,475 Balance as at 31 December 2008 43,901 340,652 384,553
Movement in reserves 15,042 - 15,042 Total comprehensive income for the year ended 31 December 2009 - 2,445 2,445
Balance as at 31 December 2009 58,943 343,097 402,040
The above statement of changes in capital and reserves has been prepared in accordance with the International Financial Reporting Standards (IFRS) and should be read in conjunction with the accompanying notes.
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1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES Statement of Compliance The financial statements have been prepared in accordance with the Electricity Act 1966 (Cap 180) and International Financial Reporting Standards (‘IFRS’) as required by the Fiji Institute of Accountants. Issue of Financial Statements The Financial Statements were approved for issue by the Authority’s Board of Directors at its meeting held on 20 May 2010. Basis of Preparation The financial statements have been prepared on the basis of historical cost, except for the revaluation of certain non-current assets and financial instruments. Cost is based on the fair values of the consideration given in exchange for assets. In the application of IFRS, Management is required to make judgements, estimates and assumptions about carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstance, the results of which form the basis of making the judgements. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that particular period, or in the period of the revision and future periods if the revision affects both current and future periods. Judgements made by Management in the application of IFRS that have significant effects on the financial statements and estimates with a significant risk of material adjustments in the next year are disclosed, where applicable, in the relevant notes to the financial statements. Accounting policies are selected and applied in a manner which ensures that the resulting financial information satisfies the concepts of relevance and reliability, thereby ensuring that the substance of the underlying transactions or other events is reported. Standards, amendments and interpretations issued but not yet effective The following standards, amendments and interpretations to existing standards have been published and are mandatory for the accounting periods beginning on or after 1 January 2010 or later periods, but the Authority has not adopted them yet. No significant impact is expected to arise out of these standards, amendments and interpretations. • IAS1(Amendment),‘PresentationofFinancialStatements’. • IAS7(Amendment),‘CashFlowStatements’. • IAS17(Amendment),‘Leases’. • IAS24(Amendment),‘RelatedPartyTransactions’. • IAS32(Amendment),‘FinancialInstruments-Presentation’. • IAS36(Amendment),‘ImpairmentofAssets’. • IAS39(Amendment),‘FinancialInstruments–RecognitionandMeasurement’. • IFRS9(New),‘FinancialInstruments–ClassificationandMeasurement’.
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2009
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NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2009
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D) The following significant accounting policies have been adopted in the preparation and presentation of the
financial statements: a) Allowance for doubtful debts The Authority establishes an allowance for any doubtful debts based on a review of all outstanding amounts at
year-end. Bad debts are written off during the period in which they are identified. b) Bond instruments The bonds issued are recorded at cost which reflects the face value of these instruments.
Transaction costs on the issue of bond instruments are capitalised and amortised to the statement of comprehensive income over the currency life of the bond instruments. Transaction costs are the costs that are incurred directly in connection with the issue of those bond instruments and which would not have been incurred had those instruments not been issued.
c) Borrowings Borrowings are recognized initially at fair value, net of transaction costs incurred. Borrowings are subsequently
stated at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the statement of comprehensive income over the period of the borrowings using the effective interest method.
Borrowings are classified as current liabilities unless the Authority has an unconditional right to defer settlement
of the liability for at least 12 months after the balance sheet date. d) Borrowing costs The borrowing costs that are directly attributable to major capital expenditures and projects under construction
are capitalized as part of the cost of these assets. Other borrowing costs are recognized as an expense in the year in which they are incurred.
The government guarantee fees on loans drawdown specifically for capital projects are capitalised. Other
guarantee fees paid are expensed. e) Capital contribution Non refundable capital contribution represents the cost of the extension, received from the developer or a
prospective consumer. The cost of the extension is the estimated cost of the extension incurred from the Authority’s nearest main supply point capable of providing the assessed load required. The developer or a prospective consumer applying for a general extension provides a non refundable capital contribution in relation to the cost of the extension which is credited to capital contribution.
f) Cash and cash equivalents For the purposes of the statement of cash flow, cash and cash equivalents comprise cash on hand, short term
deposits held with banks and bank overdrafts. Bank overdrafts are shown within borrowings under current liabilities in the balance sheet.
g) Comparative figures Where necessary, amounts relating to prior years have been reclassified to facilitate comparison and achieve
consistency in disclosure with current year amounts. h) Deferred income Government grant in aid and assets acquired at no cost to the Authority are capitalised and systematically
recognised as other income on the basis of the expected lives of the assets to which the grants relate.
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NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2009
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
i) Employee benefits i) Sick leave The provision is in relation to unutilised sick leave of non contract staff in accordance with their terms and conditions of employment and is calculated on current salary and wage rates. ii) Annual leave The provision for annual leave represents the amount which the Authority has a present obligation to pay for employees’ services provided up to the balance date. The provision has been calculated on the current wage and salary rate. iii) Long service leave The liability is determined by the conditions of employment, employees’ services provided up to the balance date and is calculated and measured at the present value of the estimated future cash outflows to be made by the Authority in respect of services provided by the employees up to the reporting date. iv) Retirement benefit The liability is determined by the conditions of employment, employees’ services provided up to the balance date and is calculated and measured at the present value of the estimated future cash outflows to be made by the Authority in respect of services provided by the employees up to the reporting date. Provisions made in respect of employee benefits which are not expected to be settled within 12 months are measured at the present value of the estimated future cash outflows to be made by the Authority in respect of services provided by the employees up to reporting date. Employee benefits which are not expected to be settled within 12 months are measured and classified as non current liabilities. (j) Foreign currency translation Transactions denominated in a foreign currency are translated to Fiji currency at the exchange rate at the date of the transaction. Foreign currency receivables and payables at balance date are translated to Fiji currency at exchange rates current at balance date. All gains and losses arising there from (realised and unrealised) are brought to account in determining the profit or loss for the year. (k) Inventories Inventories are stated at the lower of cost and net realisable value. Cost is based on the weighted average cost principle and includes expenditure incurred in acquiring the stock and bringing it to its existing condition and location. Consumables are valued at cost plus the associated delivery charges.
(l) Impairment of assets At each balance sheet date, the Authority reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are independent from other assets, the Authority estimates the recoverable amount of the cash-generating unit to which the asset belongs.
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NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2009
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(l) Impairment of assets (cont’d) Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the
estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in the statement of comprehensive income, unless the relevant asset is carried at fair value, in which case the impairment loss is treated as a revaluation decrease.
(m) Interests in joint venture Interests in jointly controlled entities are accounted for and reported using the equity method whereby an
interest in a jointly controlled entity is initially recorded at cost and adjusted thereafter for the post acquisition change in the share of net assets of the jointly controlled entity. The statement of comprehensive income reflects the share of the results of the operations of the jointly controlled entity.
(n) Intangible assets a) Investments in movie productions:
Investment in movie productions have been valued at cost and reduced by an impairment charge to arrive at a carrying amount the Authority expects to recover from the exploitation of the copyright in accordance with the Production Investment Agreement.
b) Computer Software:
Acquired computer software licenses are capitalised on the basis of the costs incurred to acquire and bring to use the specific software. These costs are amortised over their estimated useful lives (three to five years).
Costs associated with developing or maintaining computer software programmes are recognised as an expense as incurred. Costs that are directly associated with the development of identifiable and unique software products controlled by the Authority, and that will probably generate economic benefits exceeding costs beyond one year, are recognised as intangible assets.
(o) Leased assets The Authority has motor vehicles that are under operating leases, where all risks and benefits of ownership are
effectively retained by the lessor. Operating lease payments made under operating leases are charged to expense over the period of the expected
benefit. Fiji Electricity Authority, the Monasavu landowners and the Native Land Trust Board (NLTB) have in 2005
signed an agreement to lease approximately 23,000 acres of the Monasavu catchment area for a period of 99 years in return for specified payments. These lease committments are disclosed under note 21 to the financial statements.
(p) Payables Trade payables and other accounts payable are recognised when the Authority becomes obliged to make future
payments resulting from the purchase of goods and services.
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NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2009
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(q) Property, plant and equipment Property, plant and equipment are measured at cost less accumulated depreciation and impairment loss. Cost
includes expenditure that is directly attributable to the acquisition of the item. Cost of leasehold land includes initial premium payment or price paid to acquire leasehold land including acquisition costs.
Additions While expenditure on assets with a value of less than $1,000 is generally not capitalised, physical control is
maintained over all items regardless of cost. Depreciation rates Depreciation is calculated on the straight line method to write off the cost of each asset over their estimated
useful lives as follows: Rates Leasehold land 0.50% - 1.25% Buildings - Concrete 1.25% Buildings - Others 1.25% Hydro Assets - Dams 1.33% - 2.50% Hydro Assets - Tunnels 1.33% - 2.44% Hydro Assets - Plant and Machinery 2.50% - 3.00% Thermalassets 4.00%-7.00% Transmission 2.50% Communication system & control 2.86% Reticulation 4.00% Wind Mill 5.00% Furniture&fittings 7.00%-24.00% Motor vehicles 20.00% Computers 33.30% Other fixed assets except for capital spares, are depreciated when they are brought into service.
Freehold land are not depreciated. Leasehold land are amortised over the remaining lease period.
Capital spares Capital spares represent items held primarily for use in thermal stations in the event of a breakdown. In
recognition of the increased risk of obsolescence over a protracted period, capital spares are amortised in line with the depreciation rates applicable to the related plant and machinery. Capital spares are reported as part of the Authority’s fixed assets.
Disposals Gains and losses on disposals are determined by comparing proceeds with carrying amounts and are included
in the statement of comprehensive income. Repairs and maintenance Repairs and maintenance are charged to the statement of comprehensive income during the financial period
in which they are incurred. The cost of major renovations are included in the carrying amount of the asset when it is probable that future economic benefits in excess of the originally assessed standard of performance of the existing asset will flow to the Authority. Major renovations are depreciated over the remaining useful life of the related asset.
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NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2009
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(r) Provisions Provisions are recognised: - When the Authority has a present legal or constructive obligation as a result of past events; - It is probable that an outflow of resources will be required to settle the obligation; and - The amount can be reliably estimated.
Provisions are not recognised for future operating losses. Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is
determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small.
Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation.
(s) Reporting currency All figures are reported in Fiji currency. (t) Revenue recognition Electricity income Electricity income is recorded in the statement of comprehensive income on an accrual basis by estimating the
usage for customers to balance date. Other income Rental income earned from leasing FEA properties is recorded in the statement of comprehensive income on an
accrual basis. Interest income is recognised on a time proportionate basis that takes into account the effective yield on the
financial asset. Fuel surcharge represents a temporary charge applied by the Authority on electricity consumption as
determined by the Commerce Commission to recover the incremental costs of diesel fuel and is recognised on an accrual basis.
(u) Rounding off amounts Amounts in the financial statements have been rounded off to the nearest thousand dollars unless specifically
stated to be otherwise.
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1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D) (v) Taxation Current tax: Current tax is calculated by reference to the amount of income taxes payable or recoverable in respect of the
taxable profit or tax loss for the year. It is calculated using tax rates and tax laws that have been enacted or substantively enacted by reporting date. Current tax for current and prior years is recognised as a liability or asset to the extent that it is unpaid or refundable.
Deferred tax: Deferred tax is accounted for using the comprehensive balance sheet liability method in respect of temporary
differences arising from differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax base of those items.
In principle, deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets
are recognised to the extent that it is probable that sufficient taxable amounts will be available against which deductible temporary differences or unused tax losses and tax offsets can be utilised. However, deferred tax assets and liabilities are not recognised if the temporary differences giving rise to them arise from the initial recognition of assets and liabilities (other than as a result of a business combination) which affects neither taxable income nor accounting profit.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the periods when
the asset and liability giving rise to them are realised or settled, based on tax rates and tax laws that have been enacted or substantively enacted by reporting date. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Authority expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset when they relate to income taxes levied by the Taxation Authority
and the Authority intends to settle its current tax assets and liabilities on a net basis. Current and deferred tax for the period: Current and deferred tax is recognised as an expense or income in the statement of comprehensive income,
except when it relates to items credited or debited directly to equity, in which case the deferred tax is also recognised directly in equity, or where it arises from the initial accounting for a business combination, in which case it is taken into account in the determination of goodwill or excess.
(w) Segment information The Authority is not required to report segment information as it is not applicable to the nature of the
Authority’s operations. Whilst electricity revenue is distinguished by key operating segments, this is done purely for information purposes. The Authority has only one product in electricity, and costs associated with this product are totally common to all operating segments, and it is not possible nor practical to attempt to allocate costs across the operating segments. The Authority’s power generating system and distribution are operated on a fully integrated basis.
(x) Value Added Tax (VAT) Revenues, expenses, assets and liabilities are recognised net of the amount of value added tax (VAT), except:
i) Where the amount of VAT incurred is not recoverable from the Taxation Authority, it is recognised as part of
the cost of acquisition of an asset or as part of an item of expense; or ii) for trade receivables and trade payables which are recognised inclusive of VAT. The net amount of VAT recoverable from, or payable to, the Taxation Authority is included as part of receivables
or payables.
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2009
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2. FINANCIAL RISK MANAGEMENT
2.1 Financial risk factors The Authority’s activities expose it to a variety of financial risks: market risk (including currency risk, interest rate
risk and price risk), credit risk and liquidity risk. The Authority’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Authority’s financial performance. The Authority does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes. The Authority’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates and interest rates.
(a) Market risk (i) Foreign exchange risk The Authority undertakes various transactions denominated in foreign currencies, hence exposures to
exchange rate fluctuations arise. Exchange rate exposures are closely managed within approved policy parameters.
As at year end, US$ 30million short term deposits are the only assets denominated in foreign currencies. Hence,
changes in the US dollars by 10% (increase or decrease) is expected to have significant impact on the net profit and equity balances currently reflected in the Authority’s financial statements.
Held to maturity Exchange rate Held to maturity financial assets financial assets (F$000) 31December2009(Actual) US$30,000,000 0.5185 57,859 Exchangerates-strengthenby10% US$30,000,000 0.5704 52,595 Exchangerates-weakenby10% US$30,000,000 0.4667 64,281
Based on the above, if the exchange rates strengthen by 10% the Authority’s investments held to maturity financial assets would decrease by $5.26 million and if the exchange rates weaken by 10% the Authority’s investments in held to maturity financial assets would increase by $6.42 million.
However, a risk arises on the Authority’s obligation with respect to the foreign currency loan of US$88.8 million (2008: US$30M) which remains outstanding as at year end for funding of certain major capital projects. For the year ended 31 December 2009, the restatement of the Authority’s foreign currency loans has resulted in an unrealised foreign currency losses of $5.3 million, net. Further sensitivities are provided to establish the impact to the profit before tax if foreign currency exchange rate differs by 10% (increase or decrease) from that used at balance date:
Foreign currency Exchange rate Foreign currency borrowings borrowings (F$000)
31December2009(Actual) US$88,800,000 0.5185 171,263 Exchangerates-strengthenby10% US$88,800,000 0.5704 155,680 Exchangerates-weakenby10% US$88,800,000 0.4667 190,272
Based on the above, if the exchange rates strengthen by 10% the Authority’s foreign currency borrowings would decrease by $15.58 million and if the exchange rates weaken by 10% the Authority’s foreign currency borrowings would increase by $19.01 million.
Furthermore, the Authority has awarded the Nadarivatu Renewable Hydro Power Project to a contractor based in China namely Sinohydro Corporation Limited for a contract amount of US$124.8 million. Accordingly, changes in the US dollars by 10% (increase or decrease) is expected to have a significant impact on the cost of the Nadarivatu Renewable Hydro Power Project.
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2009
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2. FINANCIAL RISK MANAGEMENT (CONT’D)
2.1 Financial risk factors (Cont’d)
a) Market risk (cont’d) (i) Foreign exchange risk (cont’d) The Authority enters into forward foreign exchange contracts on a selective basis to manage its exposure to
foreign exchange rate risk.
Forward exchange contracts are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured to their fair value at each reporting date. These forward exchange contracts do not qualify for hedge accounting. However, there were no outstanding forward foreign exchange contracts as at 31 December 2009.
(ii) Price risk The Authority does not have investments in equity securities and hence is not exposed to equity securities price risk. However, the Authority is exposed to commodity price risk in the form of fuel purchased through a local agent from offshore. The volatility on international fuel prices and its impact on FEA’s profitability is given below considering two scenarios based on price, quantity mix, demand growth and hydro availability:
Average Fuel Price Consumption Fuel costs (F$/Metric Tonne) (Metric Tonne) $’000
31December2009(Actual) 1,163.54 66,409 77,270 Fuelprice-Increaseby10% 1,279.89 66,409 84,996 FuelPrice-Decreaseby10% 1,047.19 66,409 69,543 Based on the above, if fuel price increase or decrease by 10% the fuel costs to the Authority would increase or
decreaseby$7.7million.Theabovesensitivitycalculationisbasedonthe2009fuelconsumptionlevels.
(iii) Regulatory risk The Authority’s profitability can be significantly impacted by regulatory agencies established which govern
and control the electricty sector in Fiji. Specifically, fuel surcharges and electricity tariffs are regulated by the Commerce Commission.
(iv) Interest rate risk The Authority has significant interest-bearing assets in the form of short-term cash deposits. These are at fixed interest rates and hence there are no interest rate risks during the period of investment. For re-investment of short and long term cash deposits, the Authority negotiates an appropriate interest rate with the banks and invests with the bank which offers the highest interest return.
Given the fixed nature of interest rates described above, the Authority has a high level of certainty over the impact on cash flows arising from interest income. Accordingly, the Authority does not require simulations to be performed over the impact on net profits arising from changes in interest rates.
All debts of the Authority raised through bond issues bear fixed interest rates. Therefore, the Authority is not exposed to interest rate risk.
In relation to borrowings from Fiji National Provident Fund and Suva City Council, the Authority is not exposed to interest rate risk as it borrows funds at fixed interest rates.
In relation to the borrowings from banks, the Authority to certain extent is not exposed to interest rate risk as certain borrowed funds are at fixed interest rates, for the agreed term. Thereafter, the interest rates are re-negotiated and new interest rates are agreed upon. The risk is managed closely within the approved policy parameters.
The Authority did not enter into any interest swap contracts during the year.
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2009
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NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2009
2. FINANCIAL RISK MANAGEMENT (CONT’D)
2.1 Financial risk factors (Cont’d)
b) Credit risk Credit risk arises from deposits with banks, as well as credit exposures to customers, including outstanding receivables. For deposits with banks, only reputable parties with known sound financial standing are accepted. Trade accounts receivable consist of a large number of customers, residential, industrial and commercial. The Authority does not have any significant credit risk exposure to any single counterparty or any group of counterparties having similar characteristics. The carrying amount of financial assets recorded in the financial statements, net of any allowances for losses, represents the Authority’s maximum exposure to credit risk.
c) Liquidity risk Prudent liquidity risk management implies maintaining sufficient cash to ensure availability of funding. The
Authority monitors liquidity through rolling forecasts of the Authority’s cash flow position. Overall, the Authority does not see liquidity risk as high given that a reasonable portion of revenues are billed and collected.
The table below analyses the Authority’s financial assets and liabilities into relevant maturity groupings based on the remaining period at the balance date to the contractual maturity date. The amounts disclosed in the table are based on the contractual undiscounted cash flows.
Fair value estimation The carrying value less impairment provision of trade receivables and payables are assumed to approximate
their fair values. The carrying values of financial liabilities and financial assets and provisions are estimated to approximate their fair values.
Financial assets: Less than 2 to More than Total one year 5 years 5 years $’000 $’000 $’000 $’000
Cash on hand and at bank 36,490 - - 36,490 Heldtomaturityfinancialassets 57,859 - - 57,859 Withholding income tax recoverable 330 - - 330 Receivablesandprepayments 27,714 - - 27,714 Loansreceivable 621 2,485 7,250 10,356 Total 123,014 2,485 7,250 132,749 Financial liabilities: Tradeandotherpayables 23,638 26,927 - 50,565 Bondspayable 14,250 52,000 72,500 138,750 Interestbearingborrowings 102,185 28,509 90,223 220,917 Total 140,073 107,436 162,723 410,232
3. CRITICAL ACCOUNTING ESTIMATES, JUDGEMENTS AND ASSUMPTIONS Estimates and assumptions are continually evaluated and are based on historical experience and other factors,
including expectations of future events that are believed to be reasonable under the circumstances.
The Authority makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.
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NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2009
3. CRITICAL ACCOUNTING ESTIMATES, JUDGEMENTS AND ASSUMPTIONS (CONT’D) (a) Impairment of property, plant and equipment The Authority assesses whether there are any indicators of impairment for all property, plant and equipment
at each reporting date. Property, plant and equipment are tested for impairment and when there are indicators that the carrying amount may not be recoverable, reasonable provision for impairment are created. As at balance date, no provision for impairment has been made as the Authority reasonably believes that no indicators for impairment exist.
(b) Impairment of accounts receivable Impairment of accounts receivable balances is assessed at individual level and impairment tests are performed
on a more specific basis. All receivable balances relating to the closed customer accounts are estimated to have been impaired and are accordingly provided for.
(c) Deferred tax assets Deferred tax assets are recognized for all unused tax losses to the extent that taxable profits will be available
against which the losses can be utilized. Significant management judgment is required to determine the amount of deferred tax assets that can be recognized, based upon the likely level of future taxable profits together with future planning strategies.
(d) Provision for stock obsolescence Provision for stock obsolescence is assessed and raised on a specific basis based on a review of inventories.
Inventories considered obsolete or un-serviceable are written off in the year in which they are identified.
4. CAPITAL RISK MANAGEMENT The Authority’s objectives when managing capital are to safeguard the Authority’s ability to continue as a going
concern in order to provide returns and benefits for stakeholders and to maintain an optimal capital structure to reduce the cost of capital.
The Authority monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt divided by total capital plus net debt. Net debt is calculated as total borrowings (including ‘current and non-current borrowings’ as shown in the statement of financial position) less cash and cash equivalents and short term deposits. Total capital is calculated as ‘equity’ as shown in the statement of financial position.
The gearing ratios at 31 December 2009 and 2008 were as follows: 31-Dec-09 31-Dec-08 ($’000) ($’000) Totalborrowings(Note18) 359,667 242,971 Less:Heldtomaturityfinancialassets(note14(b)) (57,859) - Less: Cash on hand and at bank (36,490) (10,029) Net debt 265,318 232,942 Total capital and reserves 402,040 384,553 Totalcapital(totalcapitalandreservesplusnetdebt) 667,358 617,495 Gearingratio(netdebt/totalcapitalandreservesplusnetdebt)x100 39.76% 37.72%
The movement in the gearing ratio during 2009 resulted primarily from increased borrowings in relation to the Nadarivatu Renewable Hydro Power Project.
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5. OPERATING REVENUE 2009 2008 $’000 $’000 ELECTRICITY SALES Commercial 82,057 75,457 Industrial 37,716 35,871 Domestic 46,283 47,361 Others 2,993 750 Total electricity sales 169,049 159,439 OTHER OPERATING REVENUE Baddebtsrecovered 7 - Business interruption insurance claims received 369 - Contract sales 852 583 Deferred income 856 856 Fuel rebates - 138 Fuel surcharge 4,009 20,599 Gain on disposal of property, plant & equipment 28 - Lease rental - fibre optic 45 - Power pole rentals 650 636 Property Rentals 22 18 Realised exchange gain, net 1,320 - Sales and commissions 228 186 Street lights maintenance charges - 1 Service and licence fees 936 1,313 Training rebates 64 46 Stale cheque written back 453 - Liquidateddamagecompensationclaim 717 - Total other operating revenue 10,556 24,376 Total revenue 179,605 183,815 6. PROFIT BEFORE INCOME TAX Profit / (loss) before income tax and interest in joint venture has been determined after charging the following expenses: Allowance for doubtful debts 44 - Auditors’ remuneration for auditing services 34 33 Professional fees for other services 96 15 Directors’ fees 65 40 Depreciationonproperty,plantandequipment 28,819 28,437 Amortisationofintangibleassets 543 576 Government guarantee fees - 195 InsuranceCosts 3,627 3,490 Loss on disposal of property, plant and equipment - 126 Personnelcosts 17,993 17,310 Unrealised Foreign Exchange loss/(gain), net 5,322 (402)
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2009
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7. a) INCOME TAX BENEFIT 2009 2008 $’000 $’000 The prima facie income tax on the pre-tax profit /(loss) reconciles to the income tax expense /(benefit) as follows: Profit/(loss)beforeincometax 930 (1,270) Primafacieincometaxpayable/(benefit)at29%(2008:31%) 270 (394) Tax effect of amounts which are not deductible (taxable) in calculating taxable income: - Employee taxation scheme (9) (53) - Share of profit of joint venture (145) (222) - Deferred income (248) (265) Effect of change in income tax rate (1,341) (2,695) Over provision in prior year (42) (116) Income tax benefit attributable to profit or loss (1,515) (3,745) b) DEFERRED TAX ASSET The deferred tax assets consist of the following at future tax rates: Taxlosses 7,901 9,659 Provisionforemployeebenefits 1,512 1,673 Allowance for doubtful debts 94 85 Unrealised exchange losses 1,490 - 10,997 11,417 c) DEFERRED TAX LIABILITY The deferred tax liabilities consist of the following taxable temporary differences at future tax rates:
Differenceindepreciationforaccountingandincometaxpurpose 48,549 50,367 Unrealisedexchangegain - 117 48,549 50,484 Income tax benefit comprises movements in: Deferred tax assets 420 299 Deferred tax liabilities (1,935) (4,044) (1,515) (3,745) 8. CASH AND CASH EQUIVALENTS Short term deposits 25,000 10,011 Cash at bank and on hand 11,490 18 Bank overdraft - (1,240) Total cash and cash equivalents 36,490 8,789 Theinterestrateonshorttermdepositsheldduring2009rangedfrom1.7%to7.5%perannum.
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2009
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9. RECEIVABLES AND PREPAYMENTS 2009 2008 $’000 $’000
Electricity debtors 20,542 21,214 Other debtors 3,549 4,103 Advancetojointventure 2,174 2,174 VAT receivable - 1,254 Prepaymentsanddeposits 1,786 1,843 28,051 30,588 Allowance for doubtful debts -Electricitydebtors (322) (278) - Other debtors (15) (15) Total receivables and prepayments (net) 27,714 30,295 The terms of trade for electricity debtors are 14 days from the date of billing. Electricity debtors that are less than 3 months past due are not considered impaired. As at 31 December 2009, electricity debtors of $14,611,824 (2008: $15,896,164) were not considered impaired. Asof31December2009,theamountofelectricitydebtorsimpairedwas$322,205(2008:$278,232)netoff deposits held. The individual receivables are mainly customers, who have defaulted in payments. It was assessed that a portion of the receivables are expected to be recovered in 2010. Movements in the provision for impairment of electricity debtors and other debtors are as follows:
Balance as at 1 January 293 400 Provision for impairments of receivables 44 - Amountsrecoveredduringtheyear - (107) Balance as at 31 December 337 293 Thecreationandreleasingofprovisionforimpairedreceivableshasbeenincludedin“Otheroperating expenses” in the statement of comprehensive income. Amounts charged to the allowance account are generally written off, when there is no expectation of recovering the debt. The other classes within receivables and prepayments do not contain impaired assets. The maximum exposure to credit risk at the reporting date is the fair value of each classes of receivables mentioned above less electricity deposits. The Authority generally obtains security deposits in the form of bank guarantees and cash deposits from all electricity customers which is estimated based on two months electricity consumptions. The total carrying amount of cash security deposits in relation to the above trade receivables carriedbytheAuthorityis$16,277,380(2008:$14,835,728).Therestaresecuredthroughbankguarantees maintained by the Authority. 10. INVENTORIES Consumables - at cost 15,155 13,032 Goods in transit 11 1,144 Total inventories 15,166 14,176 11. OTHER ASSETS Foreign exchange contracts - 409 On 28 January 2009, the foreign currency contract with Reserve Bank of Fiji was settled.
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2009
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12. PROPERTY, PLANT AND EQUIPMENT 2009 2008 $’000 $’000 Freehold land Atcost 16,780 2,817 Leasehold land Atcost 13,370 13,370 Accumulated depreciation (1,039) (900) 12,331 12,470 Buildings and improvements Atcost 70,651 70,651 Accumulateddepreciation (12,147) (11,245) 58,504 59,406 Dam, tunnels, water conductor Atcost 171,107 171,107 Accumulated depreciation (20,836) (16,663) 150,271 154,444 Plant, equipment and transmission assets Atcost 335,606 317,894 Accumulateddepreciation (91,879) (73,130) 243,727 244,764 Furniture and fittings Atcost 18,003 13,117 Accumulateddepreciation (10,570) (9,809) 7,433 3,308 Wind mill At cost 35,349 35,349 Accumulateddepreciation (4,233) (2,457) 31,116 32,892 Motor vehicles At cost 14,125 11,142 Accumulateddepreciation (7,725) (5,714) 6,400 5,428 Capital spares At cost 3,476 2,471 Capital works in progress -NadarivatuRenewableHydroPowerProject 148,592 107,526 - Network Augmentation Projects 20,254 12,369 - Natadola Substation Projects - 4,906 -RuralandUrbanReticulationProjects 9,637 3,206 -TurnkeyProjects 2,237 2,231 -Others 5,779 8,548 186,499 138,786 Total -Atcost 864,966 776,704 - Accumulated depreciation (148,429) (119,918) Closing net book value 716,537 656,786
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2009
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NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2009
12
. PR
OP
ER
TY, P
LAN
T A
ND
EQ
UIP
ME
NT
(CO
NT
’D)
Reco
nciliatio
n o
f the carryin
g am
ou
nts o
f each class o
f pro
perty, p
lant an
d eq
uip
men
t at the b
egin
nin
g
and
end
of th
e curren
t fin
ancial year is set o
ut as fo
llow
s:
D
am,
Plant,
Tunnels Equipm
ent &
Capital
Freehold Leasehold
Buildings &
and Water
Transmission
Furniture W
ind M
otor Capital
Works In
Land
Land Im
provements
Conductor A
ssets &
Fittings M
ill Vehicles
Spares Progress
Total
$’000
$’000 $’000
$’000 $’000
$’000 $’000
$’000 $’000
$’000 $’000
Balance as at 31 D
ecember 2007
1,325 12,513
57,758 158,614
243,154 3,505
34,629 5,717
2,347 41,707
561,269A
dditions-
--
--
--
-484
123,751124,235
Disposal
- -
- -
- -
- (281)
- -
(281) Transfers
1,49292
2,261-
20,676592
-1,863
(304)(26,672)
-D
epreciationcharge-
(135)(613)
(4,170)(19,066)
(789)(1,737)
(1,871)(56)
-(28,437)
Balance as at 2,817
12,470 59,406
154,444 244,764
3,308 32,892
5,428 2,471
138,786 656,786
31 Decem
ber 2008
Additions
--
--
--
--
1,72586,875
88,600D
isposal -
- -
- -
- -
(30) -
- (30)
Transfers 13,963
--
-17,711
4,887-
3,174(573)
(39,162)-
Depreciationcharge
-(139)
(902)(4,173)
(18,748)(762)
(1,776)(2,172)
(147)-
(28,819)
Balance as at 16,780
12,331 58,504
150,271 243,727
7,433 31,116
6,400 3,476
186,499 716,537
Decem
ber 2009
Du
ring
the year, b
orro
win
g co
sts of $
11
,93
6,8
89
net o
f interest in
com
e of $
89
8,8
94
and
Go
vernm
ent g
uaran
tee fees of $
84
5,2
55
were cap
italised to
the co
st o
f the N
adarivatu
Ren
ewab
le Hyd
ro Po
wer P
roject an
d N
etwo
rk Au
gm
entatio
n P
rojects .
Lan
d title in
respect o
f the A
uth
ority’s acq
uistio
n o
f land
at Kin
oya h
as no
t yet been
legally tran
sferred to
the A
uth
ority.
A
greem
ent fo
r the M
on
asavu lease h
as been
prep
ared an
d lease titles w
ill be fo
rmally execu
ted an
d issu
ed o
nce th
e land
survey is co
mp
leted.
FEA m
ade su
bstan
tial pro
gress in
20
09
with
the co
nstru
ction
of th
e Nad
arivatu R
enew
able H
ydro
Pow
er Pro
ject. Total co
st incu
rred d
urin
g th
e year is $4
1.1
m
illion
and
this h
as been
capitalised
to th
e pro
ject.
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NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2009
13. LOANS RECEIVABLE 2009 2008 $’000 $’000 Sustainable Energy Limited - secured loan 10,356 10,978
Classified as: Current portion 621 621 Non-currentportion 9,735 10,357 Total loans receivable 10,356 10,978 Theloanstothejointventurecompanyaretoberepaidovera10yearperiodataninterestrateof7.5%per annum. The loans are secured by debentures over the assets and undertaking of the joint venture company. 14. FINANCIAL ASSETS a) Available-for-sale financial assets Equity accounted investments in joint venture 2,270 1,772 The Authority holds a 50% share in the joint venture company, Sustainable Energy Limited (SEL), a company incorporated in Fiji. At balance date, the issued and paid-up capital of SEL was $100 and SEL’s total assets are $21,163,965 against total liabilities of $16,623,384 resulting in a net assets of $4,540,581. Subsequent to balance day, on 16 February 2010, the Authority acquired the remaining 50% shares of the joint venture, Sustainable Energy Limited from the joint venture partner Pacific Hydro Limited for a consideration of $9.5 million (Refer Note 23).
b) Held-to-maturity financial assets Short term deposits with banks 57,859 - Duringtheyear,inFebruary2009,theAuthorityplacedUS$30millionastermdepositswithANZbankatan interestrateof1.7%.ThistermdepositisbeingheldasasecurityfortheUS$30millionobtainedfromANZbank for the construction of Nadarivatu Renewable Hydro Power Project. 15. INTANGIBLE ASSETS a) Movie production Gross carrying amount: Balance as at 1 January 1,614 1,614 Additions - - Balance as at 31 December 1,614 1,614 Accumulated impairment allowance: Balance as at 1 January 1,614 1,614 Impairment allowance - - Balance as at 31 December 1,614 1,614 Net book amount - - Investmentinmovieproductioncomprisesofinvestmentin“PirateIslands2”movieproject.Themovieproject
has been granted F1 Provisional Certificate by the Fiji Audio Visual Commission and thereby incentive by way of 150% tax deduction is available. The investment has been valued at cost and reduced by an impairment charge to arrive at a carrying amount which is an amount the Authority expects to recover from the exploitation of the copyright in accordance with the Production Investment Agreement.
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NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2009
15. INTANGIBLE ASSETS (CONT’D) 2009 2008 $’000 $’000b) Software License Gross carrying amount: Balanceasat1January 4,470 4,470 Additions 1,220 - Balanceasat31December 5,690 4,470 Accumulated amortisation: Balanceasat1January 2,587 2,011 Amortisationfortheyear 543 576 Balanceasat31December 3,130 2,587 Net book amount 2,560 1,883 Software licenses are made up of the Authority’s Financial Management Information System, Billing System, HR Information System and other specialised Energy Monitoring Information System. The software licenses has been valued at cost and amortised by an impairment charge over its remaining life to arrive at the carrying amounts.
16. TRADE AND OTHER PAYABLES Current Trade creditors 241 959 Othercreditorsandaccruals 9,277 4,659 VAT payable 403 - Accruedinterest 4,756 1,235 Customerdeposits 8,961 7,519 Total current trade and other payables 23,638 14,372 Non-Current Other creditors and accruals 2,848 300 Customerdeposits 24,079 24,204 Total non-current trade and other payables 26,927 24,504 The fair value of trade and other payables equal their carrying amount, as the impact of discounting is not significant. 17. PROVISION FOR EMPLOYEE ENTITLEMENTS Bonus 504 545 Sick leave 30 39 Annualleave 1,107 1,233 Long service leave 1,269 1,339 Retirement benefits 4,129 4,430 Total provision for employee entitlements 7,039 7,586 Current 1,641 1,817 Non-current 5,398 5,769 Total provision for employee entitlements 7,039 7,586 Balanceasat1January 7,586 8,201 Additionalprovisionsrecognised/utilisedduringtheyear(net) (547) (615) Carrying Amount as at 31 December 2009 7,039 7,586 Employee numbers Number Number Number of full-time equivalent employees as at 31st December 643 649
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NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2009
18. INTEREST BEARING BORROWINGS 2009 2008 $’000 $’000 Current Bank overdraft - 1,240 Bonds (a) 14,250 400 Termloans-ANZBank(b) 97,859 35,000 Term loan - FNPF (c) 4,288 4,138 Termloan-SuvaCityCouncil(d) 38 37 Total current interest bearing borrowings 116,435 40,815 Non-Current Bonds(a) 124,500 138,750 Termloans-ANZBank(b) - 53,725 Term loan - FNPF (c) - 4,288 Term loan - Suva City Council (d) 5,355 5,393 TermLoans-CDB(e) 113,377 - Total non-current interest bearing borrowings 243,232 202,156 Total interest bearing borrowings 359,667 242,971
TheAuthorityhasnotmetoneofitsfinancialratiocovenantswithANZBankasat31December2009andtheAuthorityisliaisingwithANZBankforaconfirmationtoaccepttheirposition.
(a) Bonds The Reserve Bank of Fiji offers, manages and carries out registry services on behalf of the Authority. The Authority’s
bonds are issued in competitive tenders. The bonds are recorded at cost which reflects the face value of the bonds. Bonds worth $400,000 were repaid during the year.
Thematuringtermsofthebondsrangefrom1to14years,whilsttheinterestratesvaryfrom3.43%to7.19%per
annum. The bonds are guaranteed by the Government of Fiji. (b) Term loans - ANZ Bank ThetermloansfromANZBankmaturesin2010atinterestratesbetween7.5%to7.6%perannumandincludea
foreign currency loan of US$30 million. Onshore loans worth $15 million were repaid during the year.
ThetermloansfromANZBankaresecuredbythefollowing:
(i) Master Operating Lease Agreement covering motor vehicles; and (ii) Guarantee given by the Government of Fiji. (iii) ShorttermdepositsplacedwithANZBank(Refernote14(b)
(c) Term loan - FNPF ThetermloanfromFijiNationalProvidentFund(FNPF)issubjecttointerestattherateof3.57%perannumandis
repayable over a period of 5 years in half yearly instalments of $2,201,558 until November 2010.
The term loan from FNPF is secured by a loan agreement and limited guarantee given by the Government of Fiji.
(d) Term loan - Suva City Council The term loan from Suva City Council (SCC) is subject to interest at the rate of 3% per annum and is unsecured. The
loanisrepayableoveraperiodof87yearsinequalinstalmentsof$200,000on25thJulyeachyearuntilJuly2065.
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NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2009
18. INTEREST BEARING BORROWINGS (CONT’D) (e) Term loan - China Development Bank (CDB) ThetermloanfromCDBissubjecttointerestrateof7.15%perannumfor60monthsfromdateofagreement.
The interest rate will be subject to LIBOR rate plus a margin of 3.2% per annum after 60 months. The loan is repayable over a period of 15 years in 24 equal semi-annual instalments. The first loan repayment will be paid on 20 March 2012 and the final repayment is on 20 September 2023.
The term loan is secured by a guarantee given by the Ministry of Finance on behalf of the Government of Fiji.
19. DEFERRED INCOME 2009 2008 $’000 $’000 EEC Grant In Aid EEC Grant in Aid 12,330 12,330 Less: accumulated amortisation (5,330) (4,846) Closing balance - 31 December 7,000 7,484 Government Grant For Rural Electrification Government Grant for Rural Electrification 9,342 9,342 Less: accumulated amortisation (3,923) (3,551) Closing balance - 31 December 5,419 5,791 Total deferred income (net) 12,419 13,275
The treatment of deferred income is in accordance with the policy set out in note 1(h) to the financial statements. 20. CONTINGENT LIABILITIES (a) Miscellaneous claims No provision has been recorded in the accounts for unsecured contingent liabilities mainly in respect of sundry Court actions against the Authority. The Authority estimates such liability, if any, to be immaterial. (b ) Contingent liabilities exist with respect to the following: Letter of credit 131 884 Immigration bond 31 31 Litigation claims - others 414 464 576 1,379 21. COMMITMENTS
Estimated amounts of lease expenditure committed at balance date but not provided for in the financial statements: a) Motor vehicle operating leases Payable no later than one year; - 125 b) Native and Crown leasehold land and other premises Payablenolaterthanoneyear; 1,692 1,647 Payable later than one year but not later than two years; 1,624 1,592 Payablelaterthantwoyearsbutnotlaterthanfiveyears; 4,837 4,775 Payablelaterthanfiveyears. 97,237 97,532 105,390 105,546 Total commitments 105,390 105,671
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NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2009
21. COMMITMENTS (CONT’D)
The Native and Crown leasehold land includes the recent lease obtained for Monasavu land. The settlement signed with Monasavu Landowners and the Native Land Trust Board commits FEA to the following future payments:
2009 2008 $’000 $’000
Payable no later than one year; 620 620 Payable later than one year but not later than two years; 620 620 Payable later than two years but not later than five years; 1,860 1,860 Payable later than five years. 53,500 54,120
22. CAPITAL EXPENDITURE COMMITMENTS Capital expenditure contracted for at balance date but not otherwise provided for in the financial statements. 141,505 161,110 Projects approved by the Board but not contracted for at balance date 87,160 85,000 The capital commitments include Nadarivatu Renewable Hydro Power Project, the Network Augmentation
Projects at Kinoya, Qeleloa, Nausori and Komo Park and Nadi power station upgrade.
23. EVENTS OCCURRING AFTER BALANCE DATE a) On 16 February 2010, the Authority acquired the remaining 50% shares of the joint venture, Sustainable Energy
Limited from the Joint venture partner Pacific Hydro Limited for a consideration of $9.5 million.
Furthermore, on 16 February 2010, the Authority entered into an Asset Purchase Agreement with Sustainable Energy Limited (SEL) for purchase of all SEL fixed assets for a consideration of $18.4 million (VIP).
The financial effect of the above event, which has occurred after balance date, will be incorporated in the next financial statements for the year ending 31 December 2010.
b) On 9 March 2010, FEA received the final loan draw-down from China Development bank of US$11.2 million to fund the Nadarivatu Renewable Hydro Power Project. The funds will be used to pay Sinohydro Corporation the main contractor of the Nadarivatu Renewable Hydro Power Project.
Apart from the above, no other matters or circumstances have arisen since the end of the financial year which may significantly affect the operations of the Authority, the results of those operations, or the state of affairs of the Authority in future financial years.
24. SIGNIFICANT EVENTS DURING THE YEAR
a) On19thJanuary2009,theAuthoritysignedaloanagreementwithChinaDevelopmentBankforUS$70millionfor funding its capital expansion projects specifically with respect to the Nadarivatu Renewable Hydro Power Project.On27thJanuary2009,theAuthoritymadethefirstdraw-downfromtheChinaDevelopmentBankloanamounting to US$43.8 million. The Authority made a second draw-down of US$15 million on 19th June 2009 from CDB.
b) Immediately upon receipt of loan proceeds from China Development Bank, on 28 January 2009 FEA settled the US$13.8 million purchased from the Reserve Bank of Fiji.
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NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2009
24. SIGNIFICANT EVENTS DURING THE YEAR (CONT’D)
c) On 15 April 2009, the Fiji dollar was devalued by 20% which led to a significant increase in the Authority’s foreign currency loan liabilities and the contracted amount for the construction of the Nadarivatu Renewable Hydro Power Project. The devaluation during the year has resulted in the Authority incurring substantial unrealised foreign exchange losses of F$5.3 million, net of unrealised exchange gains.
d) There were two unplanned contingency events that caused widespread damage to the FEA infrastructures in 2009 being the flash flood in January and Cyclone Mick in December adversely impacting the financial performance during the year.
25. PRINCIPAL ACTIVITIES AND PRINCIPAL PLACE OF BUSINESS The principal activities of the Authority are the generation, transmission, distribution and sale of electricity on Viti Levu, Vanua Levu and Ovalau as governed by the Electricity Act and Regulations. The principal place of business for the Fiji Electricity Authority is 2 Marlow Street, Suva or Private Mail Bag, Suva, Fiji Islands.
26. RELATED PARTY TRANSACTIONS
a) The Authority is a statutory body constituted by an Act of Parliament and the transactions with the Government of Fiji during the year are as follows:
2009 2008 $’000 $’000 Government guarantee fee expenses incurred during the year - 195 Government guarantee fee expenses incurred during the year and capitalised 845 402
The Government of Fiji also provides guarantees on the bonds issued by the Authority. As at balance date, the Authority had borrowed funds amounting to $354.3 million under this guarantee.
On 19 August 2009, the Cabinet approved to increase the Government guarantee on FEA’s borrowings from FJ$330milliontoUS$120millionandFJ$170millionprimarilytofundtheNadarivatuRenewableHydroPowerProject.
b) Directors
The names of persons who were Directors of the Authority during the year 2009 are as follows: Nizam-ud-Dean (Chairman) Gardiner Henry Whiteside (Deputy Chairman) Napolioni Delasau John Low Bhuwan Dutt (Appointed June 2009) Ravendra Prasad Maharaj (Resigned June 2009) Isikeli Voceduadua Cama Tuiloma Hasmukh Patel (Ex-officio Member)
Thedirectorsfeespaidduringtheyearwere$64,741.
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NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2009
26. RELATED PARTY TRANSACTIONS (CONT’D)
(c) Key Management Compensation The aggregate remuneration and compensation paid to the key management personnel, for the financial
year ended 31 December 2009 and 2008 were: 2009 2008 $’000 $’000
Salary, bonus and allowances 920 968 Superannuation 101 92 Other benefits 405 415 Total 1,426 1,475 (d) During the year, the Authority has supplied electricity to the Government of Fiji, other Government
Owned Entities, Directors and related entities and to Executives at normal commercial rates, terms and conditions.
(e) Year-end balances arising from sales/purchases of services Receivable from related parties: (note 9) Advancetojointventure 2,174 2,174 Government of Fiji 684 405 (f) Loans to related parties Loansamountingto$10,356,577weregrantedtothejointventurecompany(2008:$10,977,708).The
details of the loans given are disclosed under note 13. During the year, the Authority earned interest income amounting to $819,180 (2008: $825,583) on the
above loans. (g) Transactions with Joint Venture Operations & Maintenance fee charged 216 282 Asset licence fee charged 90 90 Project Manager’s fee charged 40 40 Interest income from loans 819 825 Loans repayments received during the year 621 - Electricity purchased during year 3,083 4,035
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TRANSMISSION & SuB-TRANSMISSION CENTRAL
District 132kv O/H Line (km) 33kv O/H Line (km) 33kv u/G Cable (km) Substations Transformer MvA
2008 2009 2008 2009 2008 2009 2008 2009 2008 2009Wailoa - Cunningham 62 62 120 120Cunningham - Kinoya A 3 3 1 1 Cunningham - Kinoya B 3 3 1 1 48 48Cunningham - Vatuwaqa 4 4 1 1 19 19Cunningham - Hibiscus Park A 7 7 1 1 27 27Cunningham - Hibiscus Park B 5 5 Cunningham - Sawani 10 9 1 1 Vatuwaqa - Suva 5 5 1 1 45 45Kinoya - Vatuwaqa 18 18 4 4 Kinoya - Sawani 1 1 1 15 15Hibiscus Park - Wailekutu 6 6 1 1 6 6Hibiscus Park - Suva 3 3 Wailekutu - Deuba 38 38 1 1 6 6Korovou 1 1
TOTAL 62 62 66 65 41 42 9 9 293 286
DISTRIBuTION NETWORK - WESTERN
OvERHEAD LINES (km) uNDERGROuND CABLES (km) SuBSTATIONS INSTALLED kvA DISTRICT High voltage Low voltage High voltage Low voltage
2008 2009 2008 2009 2008 2009 2008 2009 2008 2009 2008 2009Nadi - Tavua 1,193 1,296 1,804 1,821 156 157 69 69 1,739 1,795 142,129 146,403Sigatoka 307 319 493 498 4 5 9 9 370 397 22,704 25,024Rakiraki 146 168 173 178 4 4 1 1 134 146 6,367 7,183labasa 383 392 699 709 12 12 3 4 360 377 21,172 22,067Savusavu 90 93 65 73 7 7 1 1 96 100 5,494 6,094TOTAL 2,119 2,265 3,234 3,279 183 185 83 84 2,699 2,815 197,866 206,771Increase 24 149 23 45 2 2 1 2 63 116 7,493 8,905% Increase 1% 7% 1% 1% 1% 1% 1% 2% 2% 4% 4% 4%
TRANSMISSION & SuB-TRANSMISSION WESTERN
DISTRICT 132kv O/H Line (km) 33kv O/H Line (km) 33kv u/G Cable (km) Substations Transformer MvA 2008 2009 2008 2009 2008 2009 2008 2009 2008 2009
Wailoa 1 1 111 111Wailoa - Vuda 78 78 2 2 98 98Vuda - Pineapple Corner A 8 8 1 1 1 1 30 30Vuda - Rarawai 32 32 1 1 12.5 12.5Rarawai - Vatukoula 19 19 1 1 10 10Vatukoula - Tavua 4 4 2 2 1 1 5 5Vuda - Waqadra A 16 16 1 40 40Vuda - Waqadra B 11 11 2 2 Waqadra - Sigatoka 59 59 2 2 8 8Sigatoka - Korolevu 1 5 Vuda - Rarawai Tee-off to Pineapple Corner 2 2 1 1 Wailoa - Wainikasou 29 29 7.5 7.5Nagado - Sabeto 10 10 0.3 0.3 3 3Maro - Natadola 5 1 15Nacocolevu - Butoni 2 2 0.4 0.4 Nacocolevu - Sigatoka 3 3 3 3 1 1 5Nacocolevu - Korolevu 26 26 3 3 1 1 Sabeto - Waqadra 7 7 1 1 40 40Vuda - Sabeto 10 10 TOTAL 78 78 238 238 13 18 13 14 370 385
DISTRIBuTION NETWORK - CENTRAL
OvERHEAD LINES (km) uNDERGROuND CABLES (km) SuBSTATIONS INSTALLED kvADISTRICT High voltage Low voltage High voltage Low voltage
2008 2009 2008 2009 2008 2009 2008 2009 2008 2009 2008 2009Deuba 165 165 125 127 17 17 41 41 202 203 18,236 18,286lami 51 52 63 64 45 45 4 4 153 160 44,054 45,430Suva 16 16 141 146 207 210 42 43 174 185 93,682 102,382Kinoya 124 126 194 195 60 60 33 33 281 290 78,200 81,030Nausori 218 234 273 298 17 17 2 2 394 412 41,509 41,902Korovou 174 180 172 180 3 3 0 0 219 234 4,072 4,072levuka 49 49 39 39 1 1 0 49 49 5,545 5,559Wailoa 11 11 6 6 0 0 11 11 201 201TOTAL 808 833 1,013 1,055 350 353 122 123 1,483 1,544 285,499 298,862Increase 51 25 39 42 7 3 1 2 82 61 10,336 13,363% Increase 7% 3% 4% 4% 2% 1% 1% 0 6% 4% 4% 4%
STATISTICS 2009
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GENERATION STATISTICS (EXCLuDING INDEPENDENT POWER PRODuCERS) 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009Units Generated - Wailoa Hydro (MWh) 447,771 412,097 460,610 448,253 343,655 357,279 322,489 315,569 481,098 462,986 436,081Units Generated - Wainiqeu Hydro (MWh) 2,079 2,286 2,347 1,945 74 1,159 1,099 1,329 1,387 688 63Units Generated - Wainikasou Hydro (MWh) Commissioned in 2004 8,919 15,151 18,272 21,079 18,420 16,058Units Generated -Nagado Hydro (MWh) Commissioned in 2006 6,085 4,922 12,996 7,990
Total Generated - Hydro (MWh) 449,850 414,383 462,957 450,198 343,729 367,357 338,739 341,255 508,486 495,090 460,192
Units Generated - Diesel VlIS (MWh) 45,087 75,905 69,638 117,763 244,848 241,084 304,863 354,174 183,329 162,760 153,990Units Generated - Diesel Others (MWh) 33,524 33,606 36,879 35,738 39,773 41,105 41,169 40,189 41,740 46,178 43,670Units Generated - HFO 30,920 60,807 112,264
Total Generated - Thermal (MWh) 78,611 109,511 106,517 153,501 284,621 282,189 346,032 394,363 255,989 269,745 309,924
Units Generated - Wind Farm (MWh) - - - - - - - - 3,351 4,604 7,211Total Generated - Solar Panel (MWh) 9 11 14 10 9 6 2 4 1 0 0
Total Generated - Wind & Solar (MWh) 9 11 14 10 9 6 2 4 3,352 4604 7,211
Total FEA Generation (MWh) 528,470 523,905 569,488 603,709 628,359 649,552 684,773 735,622 767,827 769,439 777,327
made up of: Total VlIS Generation (MWh) 492,867 488,013 530,262 566,026 588,512 607,288 642,505 694,104 724,700 722,573 733,594Total Other Generation (MWh) 35,603 35,892 39,226 37,683 39,847 42,264 42,268 41,518 43,127 46,866 43,733FEA Station Auxilliary Usage (MWh) 9,926 12,777 6,473 4,815 6,777 6,144 7,294 10,101 7,865 9,138 9,050FEA Auxilliaries as a % of Total Generation 2% 2% 1% 1% 1% 1% 1% 1% 1% 1% 1%% contribution from Hydro Generation 85% 79% 81% 75% 55% 57% 49% 46% 66% 64% 59%% contribution from Thermal 15% 21% 19% 25% 45% 43% 51% 54% 33% 35% 40%% contribution from Wind & Solar - - - - - - - - 1% 1% 1%% increase/(decrease) in Hydro Generation 8% -8% 12% -3% -24% 7% -8% 1% 49% -3% -7% % increase/(decrease) in Diesel VlIS Generation -12% 68% -8% 69% 108% -2% 26% 16% -48% -11% -6%% increase/(decrease) in Total Thermal Generation -7% 39% -3% 44% 85% -1% 23% 14% -35% 5% 13%% increase/(decrease) in Total Generation 5% -1% 9% 6% 4% 3% 5% 7% 4% 0.2% 1%
Monasavu Maximum Dam level (AMSl) 745 745 745 736 733 737 735 743 746 742 742Monasavu Minimum Dam level (AMSl) 729 742 718 718 714 719 721 721 728 723 723
STATISTICS 2009
Distribution A
reas
