fiji electricity authority annual report...

FIJI ELECTRICITY AUTHORITY ANNUAL REPORT 2005�

FIJI ELECTRICITY AUTHORITY ANNUAL REPORT 20052

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’s right for FEATeam workIndividual accountabilityTransparencyInnovativeness

Constitution and FunCtionThe Fiji Electricity Authority was established, incorporated and constituted under the provisions of the Electricity Act of 1966 and began operating from August 1st of that year.

Members of the Authority are appointed by the Minister for Energy. The Chief Executive is an ex-officio member and is responsible to the Members for the Authority’s management and for 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 of power supply.

A uniform rate tariff 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 Authority.

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

Highlights for 2005 3

Members of the Authority 4

Management 5

Chairman’s Report 7

Chief Executive’s Report 13

Financial Statements 27

Statistics 51

CoVeRThe cover page portrays FEA’s commitment to its customers to provide a continuous, reliable and secure power supply. In this regard, the FEA team has no time barriers.


Hon. Minister for Energy & Mineral Resources

Nasilivata House

Samabula

Dear Minister,

Annual Report 2005

I am pleased to present the Fiji Electricity Authority’s Annual Report for 2005. The report provides a detailed summary of FEA’s performance in accordance with Section 25 of the Electricity Act Cap 180.

A major success for the year was the resolution of the long standing dispute with Monasavu landowners. FEA has now obtained a 99 year lease for the 23,000 acres of land in the Monasavu catchment area for hydro electricity generation purposes.

FEA has once again been burdened with increases in diesel fuel costs, due to exorbitantly high diesel oil prices, and continuously low water inflows to the Monasavu Dam that have restricted the hydro electric power generation from Wailoa power station.

On behalf of the Members of the Authority, I take this opportunity to thank the Government for its continued support and look forward to the future with confidence.

Sincerely,

Josaia Mar

ChairmanLett

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a major focus of Fea is to address the concerns of its customers. these Fea technicians are working with Francis Herman, General Manager of FBCl, to explore ways to reduce power usage.



• The long standing dispute with Monasavu

landowners was resolved through an out of

court settlement with the landowners and

Native Land Trust Board and a 99-year lease

was obtained for the land in the Monasavu

catchment for hydro electricity generation

purposes.

• FEA made an operating profit before

income tax of $1.24 million for the year,

despite the cost of diesel generation

increasing by $17.5 million compared to

2004 and the one-off effect of the Monasavu

settlement.

• The Parliament approved tax exemption

status for FEA up to the end of 1996. Based

on this, FEA undertook a complete re-

assessment of its tax obligations which

resulted in a tax expense of $2.79 million

and an operating loss of $1.55 million for

the year.

• The financial position of FEA remained

stable and strong. The gearing ratio at the

end of 2005 of 24.6% is well within the

international benchmark for utilities.

• A record 133,972 customer accounts were

recorded for 2005; a 7% increase from 2004.

Total units of electricity sold for the year

was 6% higher than last year.

• An independent survey done by Tebbutt

Research for FEA’s services showed that

FEA’s overall customer satisfaction rating is

80%, a slight reduction from the 83% rating

achieved in 2004.

• Parliament approved a Government

guarantee of $230 million to help FEA

obtain funding for its power capacity

expansion projects.

• Reliability of FEA’s power supply improved

by 37% as measured by an internationally

accepted power interruption duration

index.

• The 30 MW expansion at the Kinoya power

station was successfully commissioned in

October 2005.

• The 2.8 MW Nagado hydro power station was

completed with commissioning expected in

2006.

• Work is progressing satisfactorily on the

10 MW Butoni wind farm project with full

commissioning expected by early 2007.

• Detailed design work on the 38 MW

Nadarivatu hydro power project was

completed and construction of the access

road has commenced. The project is expected

to be commissioned by mid 2008.

• A Power Purchase Agreement was signed

with Pacific Free Energy Ltd, an independent

power producer, for the purchase of power

from their proposed 250kW wind turbine in

Malevu.

• A new biomass power station of up to 5

MW is to be built in Deuba with the fuel

(wood chips) supplied by the Fiji Hardwood

Corporation and other sawmills in the area.

This project is expected to be commissioned

in 2007.

• A second 132 kV transmission line between

Wailoa, Deuba and Suva is being investigated.

• A new five year contract to supply diesel fuel

and lubricant oil was signed with Mobil Oil Fiji

Ltd on 1st June 2005.

• FEA launched an intranet site called

“Veivosaki” in July 2005. The site is used by

staff as a central depository and for internal

communication.

• The three main sites of FEA at Suva, Navutu

depot (Lautoka) and the National Control

Centre in Vuda were linked with both

teleconferencing and video conferencing

facilities.

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2005


Josaia MarChairman

Gardiner WhitesideDeputy Chairman

Ratu Napolioni Delasau

Anasa Vocea Maan Singh Aisake Taito

MeMbeRSof The

AuThoRiTy


MANAGeMeNT

Sunil de SilvaChief financial officer

hasmukh PatelGeneral Manager Network

fatiaki GibsonGeneral Manager Generation

Pio Vunituraga General Manager human Resources

Tuvitu DelairewaSupply Chain Manager

Ravuni uluilakebaGeneral Manager Marketing

Colin TanManager iCT

Ron SteenbergenGeneral Manager Major Projects& Strategy

Rokoseru NabalaruaChief executive


installation of new Caterpillar diesel Generators with a capacity of 30MW at Fea’s Kinoya Power station has enhanced the security and reliability of the power supply.



In 2005, we undertook a thorough review of where we are at on that journey. I take this

opportunity to go back to where it all started; the new FEA Mission, its Logo and what

it represented. I will then summarise our achievements to date on that journey towards

fulfilling our Mission.

Our Mission is to provide clean and affordable energy solutions to Fiji and the Pacific. We

aim to provide all energy through renewable resources by 2011.

Our Mission is encapsulated in our Logo.

“The new FEA is shown as customer caring by using the softer more rounded FEA initials.

Its commitment to renewable energy is highlighted in its three waves represented by

water (blue), sun (golden), and other energy sources (green). The waves depict movement;

wind and waves that generate clean environmentally friendly renewable energy

converted to electricity. Above the waves is a windmill with the sun shining through its

centre, showing symbolically additional sources for electricity. This is a forward-looking

FEA in motion, moving towards its ultimate goal of providing clean renewable energy in

the foreseeable future.”

Customer Caring

The top 10% best-in-class for customer satisfaction in the utility industry world-wide

have been found to be rated above 85%. An independent survey done by Tebbutt

Research for FEA’s services found that FEA’s overall customer satisfaction rating is 80%

at the end of 2005. The aim of FEA is to improve this rating to at least 85% by the end

of 2006. Nevertheless, a 80% rating places FEA in the category of Market Leader when

benchmarked against the world’s best.

Our initiatives to date to improve customer service include:

• Establishing a 24 hour 7 days a week Customer Contact Centre;

• Establishing improved Customer Care Centres at Suva, Lautoka and Labasa;

• Significantly improving the reliability of power supply to our customers; in 2005

alone we achieved a 37% improvement in the reliability of power supply as

measured by an internationally-accepted power system interruption duration index;

• Introducing a more reader-friendly electricity bill with a graph showing the track

record of energy consumption to help customers manage their electricity usage;

• Providing information relating to energy savings, electricity safety awareness, and

raising public awareness of FEA’s renewable energy focus;

• Enabling customers to pay their electricity bills with convenience at Morris

Hedstrom stores nation-wide, through extended hours including weekends;

• Instituting a total of 696 projects in the period 2001 to 2005 to meet the power

requirements of urban and rural customers;

• Conducting energy audits for three major customers in conjunction with SOPAC; and

• Enhancing energy efficiency awareness through a concession rebate program for

corporate customers.

We have come a long way since 2001 when we started the journey to reform FEA into an adaptive, dynamic and efficient organisation, with a special emphasis on customer service.

Ch

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electricity is an essential commodity for the economic growth and prosperity of Fiji. the port in suva is a prime example.



Commitment to Renewable Energy

A major commitment of FEA is the development of clean and

environmentally friendly renewable energy to replace Fiji’s

reliance on diesel fuel. This will not only reduce greenhouse

gas emissions, but will also save significant foreign exchange

leakages out of Fiji when purchasing expensive and highly

price-volatile diesel oil.

In order to achieve this commitment, FEA has taken the

following initiatives:

• Formed Sustainable Energy Limited (SEL) in partnership

with Pacific Hydro Limited (PHL) of Australia to develop

renewable energy projects in Fiji;

• Commissioned the 6 MW Wainikasou hydro power station

in June 2004 with SEL;

• Completed the 2.8 MW Nagado hydro power station

with expected commissioning in 2006 with SEL;

• Progressing on the 38 MW hydro power station at

Nadarivatu with a target completion date of mid 2008;

• Progressing on a 10 MW wind farm at Butoni near

Sigatoka with full commissioning by early 2007;

• Conducted further wind monitoring and feasibility studies

at a number of sites in Viti Levu, Vanua Levu and Ovalau;

• Completed a six month solar energy project at Yaqara to

determine the feasibility of developing solar energy on a

larger scale; and

• Conducted feasibility studies for biomass energy source at

Deuba and called for Expressions of Interest for developing

geothermal power as well as converting waste to energy.

A Forward-Looking FEA

The goal of FEA is to become an adaptive, dynamic and

efficient organisation. FEA has adapted very well to the

transition from the old-fashioned, inefficient old FEA to the

lean, efficient and customer-focused new FEA. The structural

and cultural reforms that commenced in 2001 have now

been fully bedded-down. In the process, it has reduced FEA’s

controllable operating costs by more than $16 million per

year every year since 2003. In addition, interest costs have

also reduced by $8 million per year. As a public enterprise,

these productivity improvements benefit all people of Fiji.

However it is unfortunate that some of FEA’s operating costs,

which are totally outside the control of FEA, have increased

sharply during the period. These include exorbitant fuel price

increases (27% increase since 2001) and high diesel usage for

power generation (200% increase since 2001) as a result of

continuously low rainfall at the Monasavu Dam over the last

four years and escalating demand for electricity. As a forward-

looking organisation, FEA is now in the process of mitigating

these uncontrollable costs through our long-term strategies

to:

• Develop renewable energy sources and hence reduce

dependency on diesel fuel; and

• Develop a balanced portfolio of alternative generation

sources such as mini hydros, wind, biomass, solar,

geothermal and waste to energy, and hence reduce

dependency on Monasavu hydro generation to meet

electricity demand.

FEA has already become an efficient and a lean organisation.

The total number of staff employed by FEA has reduced

from 1,050 in 2001 to 575 at the end of 2005 due to natural

attrition, voluntary redundancy, outsourcing of non-core

activities and resignations.

Despite reductions in staff numbers, productivity has

improved significantly through multi skilling, training, having

the right mix of skills and the use of appropriate technology.

Productivity, as measured by production of electricity (Mega

Watt-hours) per employee, has increased from 542 in 2001 to

1,190 in 2005.

FEA takes a forward-looking long-term approach to power

planning. It has developed a 15 year power plan to ensure

the long term balance between supply and demand, and

to identify the capital investment required for building

new power capacity. Based on the above, FEA has already

embarked on a $350 million capital investment programme

up to 2010. In excess of $100 million has already been

committed at the end of 2005 to develop new generation

sources and to upgrade the transmission and distribution

systems.

FEA is positively encouraging private investor participation in

Fiji’s electricity industry. This is one reason for establishing the

joint venture company with Pacific Hydro Limited of Australia

mentioned earlier. In addition, there are three independent

power producers (IPPs) currently operating in Fiji. There is

also a number of new IPPs showing a keen interest in power

generation in Fiji. FEA has signed power purchase agreements

and memorandum of understandings with some of them.

FEA takes a key role in supporting the Government’s long

term policy of bringing electricity to every household in

Fiji. In this regard FEA has been subsidising power to rural

areas in Viti Levu and to the entire islands of Vanua Levu and

Ovalau as a social obligation at a significant cost to FEA. This

is despite the requirement by the Government for FEA to

FIJI ELECTRICITY AUTHORITY ANNUAL REPORT 2005�0

2005 Profitability

FEA made an operating profit before income tax of $1.24

million, despite the cost of diesel generation for the year

increasing by $17.5 million from 2004 and the one-off impact

of the Monasavu settlement.

The Parliament approved tax exemption status for FEA up to

the end of 1996. A complete re-assessment of past years’ tax

calculations resulted in a tax expense of $2.79 million, which

caused an operating loss for the year of $1.55 million

The return on shareholder funds for the year was negative

0.4%, compared with the 10% target set by the Government

for the Authority. However, if the social obligation costs

carried by the Authority were excluded from the calculation,

the return would have been higher at about 4.6%. In 2005

the Authority is estimated to have incurred in excess of $20

million in social obligation costs for providing subsidised

electricity to rural Viti Levu and to the islands of Vanua Levu

and Ovalau. Although the Public Enterprises Act requires the

Government to reimburse the social obligation costs to the

Authority, such costs are not refunded. The Government has

accepted, via Cabinet decision CP 2002 18th Meeting dated

10 September 2002, that the Authority’s non-commercial

contribution to social and community services through its

electricity subsidies be recognised as its annual dividend to

the Government.

The 6% growth in electricity demand in 2005 compared

with 2004, combined with the new tariff approved by the

Commerce Commission, has increased the total electricity

revenue of FEA by $14 million from 2004.

However, the Monasavu water shortages faced by FEA in 2003

and 2004 have continued into 2005. The production from the

Wailoa hydro power station was 322 GWh and is the lowest

be commercially driven. However FEA considers this social

obligation to be part of being a good corporate citizen and

helping to enhance the prosperity of Fiji people, now and in

the future.

The forward-looking FEA is reflected in its theme “Protecting

Fiji’s future, today”. A secure power supply is a critical

national issue. The theme reflects FEA’s objective to ensure

a continuous, reliable and secure supply of electricity is

available to Fiji Islands through effective power planning

today; not tomorrow.

Monasavu Settlement

FEA is pleased that it was able to resolve the long standing

dispute with the Monasavu landowners for a total payment of

$52.8 million spread over 99 years. In addition , FEA is to pay

NLTB a lease rental of $160,000 per year for the first ten years

and renewed every five years thereafter plus a one - off lease

premium of $1.5 million. In return for the above payment, FEA

will obtain a 99 year lease for approximately 23,000 acres of

land in the catchment area for hydro electricity generation

purposes. The financial impact on FEA's income statement for

2005 was an additional cost of $2.1 million, part of which was

due to prior year adjustments.

FIJI ELECTRICITY AUTHORITY ANNUAL REPORT 2005��

recorded output level over the last decade. The contribution

from hydro generation in 2005 was only 49.5% compared

with the typical average of 60%.

The lower level of hydro generation resulted in greater burn

of diesel oil amounting to 73,010 tonnes in 2005 compared

with 61,286 tonnes in 2004 and 24,247 tonnes in 2001. This,

combined with the exorbitantly high diesel prices (in excess

of $1000 per tonne for most of the year), has caused the total

fuel bill in 2005 to be $67.4 million against previous year’s

fuel cost of $49.9 million and $19 million in 2001. This cost

alone accounted for almost 48% of FEA’s total operating costs

in 2005 (excluding finance charges) and had a severe adverse

impact on FEA’s profitability for 2005.

Generally, entities driven by purely commercial objectives

would have taken appropriate mitigation measures such as

controlled power cuts or seeking an adjustment to the tariff

in order to minimise the impact of very high fuel costs. Such

was the case in the aviation industry where fuel surcharges

were imposed on customers. However, FEA managed the

situation without resorting to power cuts or imposing fuel

surcharges on customers, to avoid adverse consequences on

Fiji’s economy and the disruption to people’s daily lives.

With controllable operating costs already reduced and tightly

managed, the existing tariff rates being not sufficient to

recover diesel operating costs, and FEA’s desire to continue

to provide cross subsidies for rural electrification, it is

considered vital that a comprehensive review of the situation

is undertaken as soon as possible to ensure the long term

financial viabillty of FEA is maintained.

Financial Strength

Although the profitability was low, the financial position and

cash flows of FEA remained strong and healthy. FEA’s gearing

ratio, as measured by debt to debt plus Capital & Reserves,

was 24.6% as at 31 December 2005.

Capital & Reserves made up 66.5% of the total assets.

The liquidity position of FEA was very strong with total

cash assets of $38.1 million at the end of 2005. FEA has not

defaulted on any of its payments for either loan repayments

or payments to its creditors.

Acknowledgement

It is with great pleasure that I convey my sincere appreciation

and thanks to my fellow Members for their continual support

and contributions throughout this very challenging year.

I would like to thank our line Minister in 2005 the Hon. Col.

Savenaca Draunidalo, the Minister for Works and Energy,

for his invaluable support to FEA and for understanding

and addressing our issues in a very positive manner. This

assistance has been of tremendous help to us throughout the

year.

I also record my sincere thanks to the Hon Minister for

Finance & National Planning and the Hon Minister for Public

Enterprises and Public Sector Reform for the support given

to FEA in approving full duty free concession for our diesel

fuel, the government guarantee for FEA borrowings and the

income tax exemption status until 1996.

I would also like to thank all the members of the Parliament

and Government officials for their support and understanding

in approving the government guarantee for FEA borrowings

and income tax exemption status for FEA until 1996.

To all our customers, my sincere thanks for the business that

you have given us and also for the constructive feedback

provided to us that will help us to improve our standard of

service to you.

To all our staff, I am highly appreciative of your support and

contribution in what has been a very challenging year. The

level of dedication and commitment that you have shown

throughout the year has been remarkable. You, along with our

valued outsourced service providers, have made FEA a great

place to work.

Josaia Mar

Chairman


Fea workers install power lines for natadola to help in the development of one of Fiji’s major tourism areas. Just as important is that this work will bring electricity to rural areas that have never had access to power. Rural electricity development continues as a priority of Fea’s efforts.



Since the start of the structural and cultural reforms in 2001, the Authority has successfully kept abreast with the ever-changing dynamics of the electricity industry that has continuously challenged the Authority to stay focused, efficient and adaptive to change.This has resulted in significant improvements in our operations and in the provision of services to all our customers.

One of the key achievements in 2005 was the 37 per cent improvement in the reliability

of the power supply measured by an internationally-accepted power interruption

duration index, indicating the importance we place on improving our services to our

customers.

We are well aware that in the energy business of today FEA must continuously explore

ways in which it improves services to its customers with greater efficiencies. As part

of this objective we maintain optimum staff levels and multi skilled staff to enable the

Authority to be more flexible and adaptive in this changing business environment.

Customers

With a minimum anticipated growth rate of 5% per annum over the next three years

added to the already existing 133,972 customer accounts, FEA is challenged to provide

the best-in-class customer services, and is committed to improve the standard of service

to an even higher level.

Tebbutt Research, an independent market research company, undertook the 2005

customer survey to determine customer satisfaction on the Authority’s performance, a

service it has provided since 2002. The results showed that residential customers gave an

overall approval rating of 78% (85% in 2004), and commercial & industrial customers gave

an overall approval rating of 82% (81% last year). Overall, the average approval rating

from all of its customers was 80 per cent for the year, slightly down from the 83 per cent

achieved in 2004.

We have set a target of an 85% approval rating for the coming year and have developed

appropriate plans to achieve this goal. Whilst we will work hard to further improve, we

are heartened by the fact that when benchmarked against the world’s best we are in the

impressive category of ‘market leader.’

Joining Suva and Lautoka, Labasa now has a new Customer Care Centre, launched at a

Customers' Night in July 2005. These centres are designed to meet international best

practice, and offer customers various services such as reconnection, billing queries and

new connection applications as well as answer questions that customers may have about

our services.

The Authority’s customers continued to pay their electricity bills at 24 Morris Hedstrom

(MH) stores throughout Fiji as a result of the strategic alliance we have formed in 2004

with Carpenters (Fiji) Ltd who owns the stores. This has allowed customers to pay their

bills through extended business hours including weekends. This project is expected to

be expanded next year with the establishment of Customer Care Corners in MH stores in

Tavua, Sigatoka, Savusavu, Navua, and Levuka, where customers can directly interface with

the Authority’s customer service representatives.

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to minimize the shutdown of the high-powered transmission lines, Fea continues to train its staff in advanced methods of live-line maintenance work. these Fea workers are training in these sophisticated live-line techniques.



In another move towards greater efficiency, the Authority

has formed an alliance with Telecom Fiji Ltd. (TFL) to

combine the following services

• Joint customer service centres in Nausori, Nadi, Namaka

and Valelevu expected to be implemented in 2006;

• Joint customer contact centre services to include:

• Sharing of part time help.

• Sharing of graveyard shift workers.

• Other areas of duplicated services.

The Authority continues to spearhead ways in which

customers can save on electricity. It has introduced an

energy savings appliance shop operated by Poly Products

in the Authority’s head office. It also introduced, in

conjunction with Poly Products and Carpenters Fiji Ltd, a

successful promotion to sell energy-efficient light bulbs in

which customers were encouraged to “buy one and get one

free.”

In November 2005, the Authority signed a contract with

Post Fiji Ltd for the latter to produce and collate the

Authority’s customer bills, amounting to about 130,000 per

month, which has resulted in significant cost savings for the

Authority.

The Authority successfully completed a pilot project in

Levuka, which started in 2004, to determine the advantages

of using computerized automated meter reading (AMR)

units in its overall operation. The advantages of the new

AMR system were encouraging and the Authority will

introduce it into selected customer segments next year.

The key advantages are:

• Ability to remotely read electricity meters through the

use of telephone lines;

• Update of customer usages on daily, weekly and

monthly basis; and

• Ability to remotely disconnect & reconnect power to

customers; and

• Minimum error level on energy usage recorded on the

AMR.

The Authority has completed an evaluation of its existing

prepaid Cash Power electricity payment system that is

currently used for its rural customers. It is planned that

a new computerized prepaid system with value added

features would be introduced in 2006.

Customer Information

Energy saving tips, vegetation management and a

heightened awareness of electrical safety continued to be

the main focus in the Authority’s customer communication

activities during the year through both media advertising

and the Fiji Showcase.

Tariff Increase

FEA has introduced average price increases of 3.3% for

residential customers and 6.9% for commercial customers

during the year. Excluded from the increase are Lifeline

tariff residential customers who had no price increases. The

increases were approved by the Commerce Commission and

implemented on 1 January 2005.

However, the increased tariff rates still fell short of the unit

cost of electricity produced at the Authority’s diesel power

stations of approximately 22 cents per unit. The average

selling price per unit was 20.9 cents in 2005 and therefore

resulted in a loss from every unit of electricity generated from

our diesel power stations.

In addition, the tariff structure approved by the Commerce

Commission does not provide for price adjustments that

take into account the volatility of today’s diesel fuel prices. It

is important that tariff adjustments relating to fuel prices be

examined to ensure the long-term financial viability of the

Authority.

Rural Electrification

In 2005, FEA spent $5.3 million on rural and urban power

development projects. Of these, $1.9 million was spent on 49

rural electrification projects. The balance of $3.4 million was

spent on completing 50 urban power development projects.

A total of 3,360 rural customers were connected in 2005.

Cost sharing between Government and FEA funded

programmes continued to cover the expenditure required for

the rural electrification work.

Staff & Industrial Relations

Staff numbers

The total number of staff employed by FEA reduced from

595 in 2004 to 575 at the end of December 2005 due to

natural attrition, terminations, voluntary redundancy and

resignations.

Staff training

During the year, a total of 185 training courses were

conducted for training of staff, of which 135 were conducted

in-house by the Authority’s trainers.

Training was also provided to ten additional electric power

linesmen who are now accredited to work on 132kV lines. This

brings the number of electric power linesmen who are now

qualified electric power linesmen to a total of 27.


as part of Fea’s efforts to ensure continual supply of electricity, the authority continues to clear vegetation from the vicinity of power lines that can cause faults and interrupt electricity flow.



During the year, two staff members were sponsored to

pursue their Bachelor of Engineering degree courses with

majors in Electrical & Electronics at the Auckland University of

Technology.

The training team produced a line mechanic training manual

that will be introduced next year as part of the line mechanic

program. This program will be used to train diploma and

trade certificate holders as well as qualified linesmen and

electricians. They will be qualified to perform both electrical

and linesman responsibilities following a three year training

program.

In September, a total of 37 apprentices from the Authority

graduated from TPAF after completing their apprenticeship

programs. Four of these apprentices received the ‘Best

Apprentice’ awards in telecom and electrical fields.

The Authority is training Public Works Department (PWD)

employees to provide construction and maintenance of

electric power lines following a strategic alliance agreement

between the Authority and the Ministry of Energy. The

selected PWD employees will be trained and accredited early

next year before working with the Authority in the second

half of 2006.

Health and Safety

Safety is paramount in the Authority’s culture. The Authority

is continually monitoring the work place safety with the goal

of attaining zero injuries.

In 2005, lost time injuries decreased by 40% compared with

2004. However, there was one fatality in 2005. An electric

power linesman was electrocuted in Tailevu when the boom

of a crane truck came into contact with a live 11 kV line while

the team was clearing vegetation. The incident was fully

investigated and proper actions have been undertaken to

ensure that this will not happen again.

Total Lost Time Frequency Rate also fell by 27% this year

compared to 2004. Vehicle accidents also reduced by 17% in

2005 from last year, resulting in the reduction of vehicle repair

costs by 22%.

The Authority's Safety Manual was reviewed, reprinted and

distributed to all staff.

Towards the end of 2005, the Authority engaged Ergon

Energy, an energy utility based in Queensland, Australia,

to develop a strategic HSE plan for the next five years

commencing from 2006. Much of the focus will be on the

behavioural side of safety as well as improving the safety

management system.

Inculcating FEA values

The Authority places much importance on inculcating its core

values, as part of its mission statement, in all its employees.

Those recently employed are given an induction course with

heightened focus on the Authority’s core values. During

annual appraisals of staff performance, all staff are assessed

on their commitment to these core values.

Industrial relations

During the year, the Authority successfully introduced the

concept of “simultaneous negotiations” of the logs of claims

put forward by the Authority and the unions.

2005 was one of the most challenging years in the history of

the Authority in terms of industrial relations. Two of the three

unions issued strike notices to the Authority on two separate

occasions but strikes were averted when the parties agreed

and resolved the disputed issues amicably. The unresolved

issues were referred to the Abitration Tribunal for resolution.

Financial Performance

Profitability

The Authority continued to be confronted throughout the

year with low water inflows at the Monasavu hydro dam, an

ongoing problem since 2003, with extended periods of low

rainfall. This resulted in the reduction of power generation at

our Wailoa hydro power station to a 10-year low-level of 322

GWh.

At the same time, diesel fuel prices escalated to a record high

of $1,142 per tonne in November 2005. Demand for electricity

grew by 6% in 2005, further increasing the requirement to

burn expensive diesel oil.

Resolution of the Monasavu land dispute also had a one-off

cost impact of $2.1 million in 2005, part of which was for prior

year adjustments.

Despite the above impacts, the Authority made a net profit

before tax of $1.24 million. However, there was an operating

loss after tax of $1.55 million for the year due to an income

tax expense of $2.79 million. This was the result of a complete

re-assessment of the Authority’s tax obligations, subsequent

to the Parliament’s approval of the Authority’s tax exempt

status until the end of 1996.

Revenue from electricity sales increased by $14 million in

2005 ($136.3 million) over the previous year ($122.3 million)

for two reasons. Firstly, the tariff increases approved by the

Commerce Commission were implemented from 1 January

2005. Secondly, the demand for electricity in 2005 grew by 6%

over the previous year.


Total quantity of diesel burn increased from 61,286 tonnes

in 2004 to 73,010 tonnes in 2005 as a result of continued low

water inflows to the Monasavu dam.

The average price of diesel was $944 per tonne in 2005

compared with $809 per tonne in 2004. The diesel price

peaked at $1,142 per tonne in November 2005. Given that

the Authority’s breakeven diesel oil price is approximately

$400 per tonne for a 10 per cent return on shareholder funds,

the financial burden on the Authority due to volatile and

high diesel oil prices is substantial.

Other operating revenue of $5.7 million in 2005 was below

the $9.9 million earned in 2004. In 2004, the Authority had

received insurance settlements for Monasavu and Wainiqeu

damage claims.

Total operating costs of the Authority increased by $21.6

million in 2005, from $119.4 million in 2004 to $141.0 million

in 2005. This was mainly due to an increase in diesel fuel costs

in 2005 of $17.5 million, up from $49.9 million in 2004 to $67.4

million in 2005. The diesel oil cost alone accounted for 47.8%

of the Authority’s total operating costs in 2005.

Revaluation

The Authority, through the independent valuer Beca Carter

of New Zealand, completed a discounted cash flow valuation

of its plant and equipment assets in 2005. This resulted in a

$74.2 million upward revaluation as at 1 January 2005. One

of the reasons for the higher valuation is the increase in tariff

The generation mix for the year was 49.5 per cent for total

hydro generation and 50.5 per cent for diesel and other

generation. The total generation from our diesel power

stations in 2005 was 22.6 per cent greater than in the

previous year. Total hydro generation has deteriorated

substantially from 92 per cent in 1990 to 56.6 per cent in 2004

and to 49.5 per cent in 2005.

Tonn

es (

‘000

)

$ pe

r to

nne


rates approved by the Commerce Commission for 2005, 2006

and 2007. The accounting depreciation has increased by $2.1

million as a result of the revaluation.

Financial Strength

The Authority continued to enjoy a solid and strong financial

position. The Authority’s gearing ratio (debt to debt plus

capital & reserves) of 24.6% as at 31 December 2005 compares

favourably with the international benchmark for power

utilities, which has placed the Authority in a favourable

position to attract potential lenders, both locally and overseas.

Risk Management and Insurance

During 2005, the Authority undertook a comprehensive

review of its major business risks. This resulted in a list of forty

business risks that the Authority will closely monitor and

mitigate, as required. Action plans have been developed to

implement this.

The Authority’s insurance programmes were renewed

for another year after the insurers were satisfied with our

business operations, including the level of maintenance of

the assets and the controls that are in place to minimize

risk. Two new insurance agencies joined the programme to

help ensure that full insurance cover was obtained by the

Authority for its assets, at a reduction in the annual premium

of $260,000.

section sCi target actual achievementFinancial Performance Measures Ratio of net assets to total assets 60.45% 66.45%Net Profit/(loss) after tax $14.7million ($1.5)millionReturn on net assets after tax andcross subsidies 3.30% -0.4%Return on net assets after tax and beforecross subsidies 7.60% 4.6%Gearing ratio (debt to debt plus equity) 33.90% 24.6%Net interest cover (operating profit/net interest) 1.54 1.50State’s investment value in the FEA $438.9million $402.7million non-Financial Performance Measures Average price of electricity 21.0c/unit 20.91c/unitGovernment Guarantee $230million achievedFEA tax exemption status Up to 1996 achievedDuty concession on diesel fuel For 2005 achievedConnect new rural customers At least 3,000 3,360 new connectionsCustomer service centre operate 7 days 24 hrs/day achievedPublic awareness Increase achievedCustomer to staff ratio 215 233SAIDI 400 minutes 1,368 minutesSAIFI 10 frequencies 26 frequenciesRenewable generation Add new capacity VaturuPotential renewable energy sources Investigate & research achievedRegulatory compliance 100% compliance 100% complianceJoint venture partnership Pacific Hydro Limited Vaturu hydro projectIndependent power producers Encourage Pacific Free EnergyCapacity expansion Kinoya generator sets achievedTotal revenue $139.4million $142.1millionTreasury management Improve achievedCustomer service training For all employees achievedTime lost through industrial disputes Nil NilInfringements of the law Nil NilEnabling technology Video conferencing achievedRisk management framework Implementation achieved

Performance against the statement ofCorporate intent for 2005

Capital & Reserves made up 66.5% of total assets and the

current ratio of current assets to current liabilities was 1.52. for

2005.

The liquidity position of the Authority was very strong with

total cash assets of $38.1 million as at the end of 2005.

During 2005, the Authority successfully issued F$30 million

in long-term bonds with tenures between 7 and 15 years. It

also raised 3 to 5 year bi-lateral loans of F$35 million during

the year. The Authority redeemed bonds totalling $4 miilion

during the year.

Discussions with the three major development banks (Asian

Development Bank, World Bank and the European Investment

Bank) continued throughout 2005. The Authority signed Aide

Memoire and Memorandum of Understandings with the

development banks for raising potential foreign currency

loans to fund the Authority’s large capital investment

programme.

Earnings before interest, tax, depreciation and amortisation

(EBITDA) is $28.1 million. This provided an EBITDA gross

interest coverage ratio of 7.45 times and a net interest

coverage of 10.88.


suva Private Hospital depends on electricity to provide the essential services so important for the well-being of its patients as shown here in its X-ray department.



Production

Water Management

As a result of low water inflows to Monasavu dam in 2003 and

2004, the storage level in the lake at the beginning of 2005

was critically low at 721 metres above mean sea level (MSL);

this is only 6 metres above the minimum safe operating

level. In order to avoid the possibility of supply shortages, the

Authority established an internal dispatch team in early 2005

to formulate and implement optimisation strategies for the

operation of the power system and water management.

Through greater use of diesel generation at the Authority’s

diesel power stations, it managed to raise the storage level to

726 metres MSL by April, but at a substantially greater diesel

fuel cost to the Authority.

Heavy rainfall received in April resulted in an increase in the

dam's storage level by nearly nine metres to 735 metres

MSL. However, continuously low rainfall for four months until

the end of August caused the storage level to fall back to

721 metres MSL, even with the increase of diesel generated

power.

The storage level at Monasavu dam increased to 726 metres

MSL at the end of 2005, five metres higher than the starting

level at the beginning of the year. This was due to above-

average inflows from September to November, combined

with controlled water releases from the Monasavu hydro dam

for generation at its Wailoa hydro power station.

These actions will have a positive impact on the profitability

of the Authority for 2006.

The impact of low water inflows to Monasavu in 2005 is

that generation from the Wailoa hydro power station was a

low 322 Giga Watt-hours. This is the lowest recorded output

for that power station in the past ten years. Total rainfall in

2005 was 4,465 mm compared with the lowest ever rainfall

recorded in the history of 3,425 mm in 2004.

The average generation mix for 2005 was 49.5 per cent

hydro, 47.5 per cent diesel with the other three per cent

provided by the three independent power producers: Tropik

Woods, Fiji Sugar Corporation and Emperor Gold Mine. In

comparison, 57 per cent of power was generated from hydro,

39 per cent from diesel and 4 per cent from others in 2004.


FEA has taken a giant step towards fulfilling its mission

statement to provide all energy through renewable

resources by 2011.

It is currently building a wind farm along the Butoni ridge

line near Sigatoka town on the island of Viti Levu.

Increased power

When completed, the wind farm will have 37 wind turbines

each having a power capacity of 275 kilowatts. The total

installed capacity will be close to 10,000 kilo-watts and it

will be capable of producing about 12 million kilo-watt

hours of electrical energy on average each year; enough

electricity to supply about 8,000 residential customers in a

year.

The total cost of the wind farm is expected to be nearly $34

million. It is expected to be commissioned by early 2007.

Renewable growth and benefits

The Butoni wind farm is one of the many projects in

FEA’s capital investment portfolio that will increase Fiji’s

power generation from renewable resources and reduce

dependency on expensive imported diesel fuel.

It will not only reduce the dependency on imported diesel

fuel, but will also help to abate 7,500 tonnes of greenhouse

gas emissions per year that would otherwise be generated

from the use of diesel fuel.

The foreign exchange savings alone, from replacing

imported diesel oil, would be in excess of $2 million per year.

It reinforces the Fiji Government’s efforts to promote the

development of renewable energy resources in Fiji.

Turbines suited to Fiji

The Vergnet turbines, manufactured in France, will be 55

metres high with twin blades, and can generate electricity

between wind speeds of 4 and 20 metres per second. The

Vergnet turbine design is well suited to Fiji conditions

because of its ability to lower the wind turbines in response

to cyclone warnings; it takes about 40 minutes to lower one

turbine. A similar installation already exists in New Caledonia.

Working with landowners

FEA has developed a close relationship with the landowners.

The two Mataqalis in Nakabuta and Lawai support the

development of the wind farm. A 99-year lease has been

agreed for the use of the land where it will be located. Several

Mataqali representatives have visited the wind farm in New

Caledonia to better understand wind farm operations.

Environmental impact assessment

To ensure minimum impact on the surroundings, an

Environmental Impact Assessment was completed in 2005.

Subsequently, the Department of Environment has granted

FEA the necessary permits required for construction.

(Artist's view of butoni wind farm)

Butoni - a major step for renewaBle energy



Power System Reliability

Three internationally accepted performance indicators are

used to measure the Authority’s power system reliability:

• The total length of time that a customer is without power

over a year, measured by the System Average

Interruption Duration Index (SAIDI). This has improved by

37 per cent in 2005, reducing from 2,155 minutes in 2004

to 1,368 minutes in 2005.

• The average number of times that a customer’s power

supply is interrupted in a year measured by the System

Average Interruption Frequency Index (SAIFI). This has

improved by 26 per cent in 2005, reducing from a

frequency of 35 times in 2004 to 26 times in 2005.

• The average time that a customer is without power for

each interruption is measured by the Customer Average

Interruption Duration Index (CAIDI). This has improved by

15 per cent, reducing from 62 minutes in 2004 to 53

minutes in 2005.

The main reasons for the power interruptions that occurred

in 2005 were:

• Planned maintenance work on overhead lines &

underground cables (26 per cent)

• Faults on generators (5 per cent)

• Vegetation interfering with lines (18 per cent)

• Failure of line hardware (44 per cent)

• Natural disasters e.g. flood, lightning etc (7 per cent)

Despite the significant reduction in outages in 2005, the

Authority is committed to continuously improving the

three reliability indices until they are at least in line with

international utility benchmarks.

The Authority has introduced a number of initiatives to

improve power system reliability to international standards

including:

• Live-line maintenance of its power lines at all voltage

levels

• Effective vegetation management

• Installation of infrared cameras and line fault indicators

• Ensuring that adequate supply capacity is available to

meet the demand for electricity at all times.

As a result of excessive outages in 2004, the Authority

carried out an extensive analysis of its power system with

special emphasis on its stability under faulty conditions

and the suitability of existing protection settings. Following

the analysis that took several months, the Authority has

addressed a number of problems, and has introduced a

detailed forward plan for further improvements. With these

ongoing efforts, the reliability of the power system will

continue to improve.

Long Term Power Planning

Power Development Plan

The Authority’s 2004 long-term power development plan

determined that an intensive capital investment of nearly

$500 million would be required to 2010. These funds would

be required for power projects to meet Fiji’s rapidly growing

demand for electricity.

The Authority is planning to fund $350 million of these

requirements. The remaining $150 million is expected to be

funded by the private sector including independent power

producers.

The Authority has already committed to approximately $100

million of the planned capital expenditure. Included in this

is the Kinoya diesel power station expansion that has been

completed at a cost of $30 million with the commissioning of

30 MW new Caterpillar generating sets in October 2005.

Renewable Energy Development

The Authority has undertaken a number of renewable energy

projects during the year. These projects will provide clean

renewable energy to eventually replace diesel generation in

Fiji. The following is a list of projects:

• The Wainikasou hydro power station with an installed

capacity of 6 MW was commissioned in 2004;

• Work on the Nagado hydro power project (Vaturu) with an

installed capacity of 2.8 MW was completed in 2005

at a total cost of about $11 million, and is expected to be

commissioned in 2006;

• Kinoya diesel power station expansion was completed at

a cost of $30 million with 30MW of generating capacity

supplied by Caterpillar Power Generation Systems. These

engines are certified to run on refined vegetable oils;

• The 10 MW Butoni Wind farm project near Sigatoka is

already in the implementation phase at a total cost of

$34 million, with full commissioning expected by early

2007;


Fea’s commitment to renewable energy is no better illustrated than in the Wainikaso hydro electric scheme shown here. the authority continues to introduce hydro electricity and other forms of renewal energy as part of its vision.



• Detailed design work on the proposed Nadarivatu

hydropower project estimated at $100 million has been

completed and construction of the access roads is

underway. It is expected that this project will be

developed by the Authority’s joint venture company

(Sustainable Energy Limited) in partnership with Pacific

Hydro Limited of Australia. This will not only bring private

funds into Fijis’ power sector development, but it will also

save invaluable foreign exchange through reduced diesel

fuel imports;

• Expressions of Interest (EOI) were sought for the

development of a biomass plant at Deuba to utilize wood

waste from sawmills such as Fiji Hardwood Corporation

at Waivunu. Analysis is continuing on the EOI responses.

• Biomass options were investigated in detail for Savusavu.

Four sites have been identified to develop between 1 and

2 Mega-watts of biomass power capacity;

• Expressions of Interest (EOI) were sought for the supply of

500 tonnes of biofuel per month. Selected diesel

generators would be converted to operate on multi-fuels

including palm oil and canola oil. Preliminary trials have

already been carried out at the Authority’s Sigatoka Power

Station to determine biofuels' suitability for smaller high-

speed diesel engines;

• Further wind monitoring is being conducted at Tagitagi

(Tavua) and Yaqara to test for wind farm potential. Wind

monitoring is also being conducted in Vanua Levu and

Ovalau to determine suitability for wind farms; and

• There is a further $85 million planned for transmission

and distribution augmentation. This includes a second

132 kV transmission network to supplement the existing

132 kV system linking the Wailoa power station to Suva

and Nadi load centres. A half-life refurbishment of the

Wailoa hydro power station, which is nearing 25 years of

operations, is also in the planning stages.

FEA has also undertaken feasibility studies for other

biomass, bio fuels, bio energy, solar energy and gasification

opportunities for the future benefit of Fiji by substantially

reducing our dependency on diesel fuel.

Independent Power Producers (IPPs)

Currently there are three independent power producers (IPPs)

operating in Fiji. They are Fiji Sugar Corporation, Tropik Woods

and Emperor Gold Mines. All are engaged in co-generation, i.e.

they produce electricity for their own use in their production

facilities and sell the surplus to FEA to distribute to customers.

During the year, two new Power Purchase Agreements were

signed. The first was with Tropik Woods for an enhanced

9.3MW co-generation plant at their mill in Drasa, Lautoka to

replace their existing facility. The second is with Pacific Free

Energy Ltd for the first of a two stage proposed Malevu Wind

Farm Project. The first phase of the project is a small 250 kW

installation.

FEA has developed an information package for IPPs to

acquaint these potential power producers with the relevant

facts to help them in preparing their proposals. Included

is the IPP framework that provides a generic criterion for

assessment of its proposals. This package has been developed

to encourage their participation in Fiji’s electricity industry.

The recent tariff increase approved by the Commerce

Commission has also provided an incentive for private sector

participation.

Regulatory

The Regulatory unit of the Authority is responsible for the

licensing of new Independent Power Producers in accordance

with the Electricity Act.

Inspections were carried out during the year on the expanded

Kinoya power station and also the new Nagado hydro power

station.

During the year, the Fiji Government commissioned SOPAC,

through its Pacific Islands Energy Policy and Strategic Action

Planning Division, to carry out a review of the Authority’s

regulatory functions. The report has been completed and the

Authority is awaiting the Government direction on the future

of the Regulatory Function with FEA.

Information & Communication Technology

The entire computer system in the Authority is now running

on one standard operating environment in the Windows

2003 platform. This standardization allows for IT support

and services to be managed more efficiently. It also gives

more control over data integrity and security within the

Authority. This standard platform will be used for all future IT

developments.

In July 2005 the Authority launched an Intranet site called

“Veivosaki” for internal information and communication

between the staff members.

Gentrack, the Authority’s electricity billing and customer

service software, has been used since 1999. In 2005, the

Authority began a project to upgrade Gentrack to its latest

Fea’s commitment to renewable energy is no better illustrated than in the Wainikaso hydro electric scheme shown here. the authority continues to introduce hydro electricity and other forms of renewal energy as part of its vision.



version comprising state-of-the-art technology and user-

friendlier interface. This new version will go live by mid- 2006.

The Authority is in the process of implementing new Human

Resources Management and Human Resources Information

Systems. These software systems will enable the Authority to

computerise its various HR functions; it will go live by mid-

2006.

The Authority is also in the process of enhancing its Financial

Management Information System and is currently evaluating

responses received from interested suppliers on a Request for

Proposals issued by the Authority in November 2005.

The Authority has an extensive Radio Telephone (RT) system

that is the primary form of communications between its field

operational staff and its national control centre. The RT system

was last upgraded in 1992. The Authority is doing a full upgrade

of the outdated RT system, replacing it with a completely new

system and technology. This new system is expected to be

completed in 2006.

In its effort to become more efficient and effective in internal

communications, the Authority installed video conferencing

and teleconferencing facilities to link its three main centres of

Suva, Navutu (Lautoka) and the National Control Centre in Vuda.

Supply Chain

Based on a review carried out in 2004 to improve the supply

chain processes within the Authority, it began implementing

the recommendations from the study in March 2005. The

areas addressed included forecasting and planning, supplier

collaboration, inventory management, tendering, delivery

performance and enterprise resource planning.

Acknowledgement

In a year of major challenges and new initiatives, I must

thank the Chairman and the Board of Directors for their clear

sightedness, constructive support and guidance.

Good performance and growth cannot be achieved without

a committed workforce. I wish to thank all members of the

executive team, the employees in our organisation and our

service providers for walking that extra mile to deliver the

results, often under trying conditions.

I also record my sincere thanks to all our customers,

government officials, unions and other key stakeholders for

their support during the year

We look forward to delivering increased value to our

shareholder, customers and all our stakeholders in the coming

year.

Rokoseru Nabalarua

Chief Executive


Statement by Members of the Authority 28

Independent Audit Report 29

Income Statement 30

Balance Sheet 31

Cash Flow Statement 32

Statement of Changes in Capital and Reserves 33

Notes To and Forming Part of the Financial Statements 34-50

financial statements



statement By memBers of tHe autHority

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 & reserves and cash flows of the Fiji Electricity Authority as at and for the

year ended 31 December 2005.

2. the statements have been prepared in accordance with the provisions of the Electricity Act 1966 (Cap 180)

and Fiji Accounting Standards.

3. the basis of preparation of the accounts and the classification and carrying amounts of assets and liabilities

as stated in these accounts are appropriate.

31 May 2006, Suva

Josaia Mar Gardiner Whiteside

CHAIRMAN DEPUTY CHAIRMAN


inDepenDent auDit report to tHe memBers of tHe fiji electricity autHority for tHe year enDeD 31 DecemBer 2005

Scope

I have audited the financial statements of the Fiji Electricity Authority set out on pages 30 to 50 in accordance with the provisions of the Electricity Act 1966 and Section 13 of the Audit Act. The Authority is responsible for the preparation and presentation of the financial statements and the information they contain.

I have conducted an independent audit of these financial statements in order to express an opinion on them.

The audit has been conducted in accordance with Fiji Standards on Auditing to provide reasonable assurance as to whether the financial statements are free of material misstatement. My procedures included examination, on a test basis, of evidence supporting the amounts and other disclosures in the financial statements and the evaluation of accounting policies and significant accounting estimates. These procedures have been undertaken to form an opinion as to whether, in all material respects, the financial statements are presented fairly in accordance with Fiji Accounting Standards and statutory requirements, so as to present a view which is consistent with my understanding of the Authority’s financial position, the results of its operations, movement in the Authority’s reserves and its cash flows.

The audit opinion expressed in this report has been formed on the above basis.

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 Fiji Accounting Standards:

(i) are in agreement with the books of account;

(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 2005 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 Fiji 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 Eroni Vatuloka25 May 2006 Auditor General


income statement for tHe year enDeD 31 DecemBer 2005

Notes 2005 2004 $’000 $’000

Revenue 2 136,337 122,342

Other operating revenue 2 5,721 9,920

Total revenue 142,058 132,262

Personnel costs (14,275) (14,185)

Fuel costs (67,432) (49,938)

Electricity purchases (8,834) (7,455)

Lease & Rent expenses (4,693) (3,275)

Depreciation 9 (24,304) (20,260)

Other operating expenses (21,453) (24,342)

Total operating expenses (140,991) (119,455)

Profit from operating activities 1,067 12,807

Finance cost (3,774) (4,269)

Interest income 1,189 762

Operating profit before income tax and interest in Joint Venture (1,518) 9,300Share of profit of joint venture 263 6

Operating profit before income tax 3 (1,255) 9,306 Prior years deferred income 17 2,498 -

1,243 9,306

Income tax expense 4 (2,794) (15,909)

Operating loss after income tax (1,551) (6,603)

The above income statement should be read in conjunction with the accompanying notes.


Balance sHeet as at 31 DecemBer 2005

Notes 2005 2004 $’000 $’000 CAPITAL & RESERVES

Retained profits 123,187 124,738

Asset revaluation reserve 237,193 162,993

Asset replacement reserve 10,000 10,000

Capital contribution 32,331 27,647

402,711 325,378

Represented by:

CURRENT ASSETS Cash and cash equivalents 5 38,093 19,007

Receivables and prepayments 7 26,680 20,481

Inventories 8 13,967 10,510

78,740 49,998

NON-CURRENT ASSETS Property, plant & equipment 9 505,059 385,548

Loan 10 10,895 10,088

Investments 11 1,001 6

Deferred tax asset 10,318 6,475

527,273 402,117

TOTAL ASSETS 606,013 452,115 CURRENT LIABILITIES

Trade and other payables 12 15,108 14,612

Provision for employee entitlements 13 1,023 1,255

Provision for income tax 4 - 6,600

Interest bearing borrowings 14 34,860 4,033

Other borrowings 15 728 -

51,719 26,500

NON-CURRENT LIABILITIES Trade and other payables 12 11,585 10,033

Provision for employee entitlements 13 4,821 5,050

Interest bearing borrowings 14 96,475 56,335

Deferred income 16 15,845 19,199

Deferred tax liabilities 22,857 9,620

151,583 100,237 TOTAL LIABILITIES 203,302 126,737 NET ASSETS 402,711 325,378

The above balance sheet should be read in conjunction with the accompanying notes.


casH flow statement for tHe year enDeD 31 DecemBer 2005

Note 2005 2004 $’000 $’000 Cash flows from operating activities

Receipts from customers 145,705 147,736

Payments to suppliers and employees (119,569) (106,387)

Interest received 383 523

Interest paid (3,536) (3,983)

Net cash flows from operating activities 6 22,983 37,889

Cash flows from investing activities

Advance to Joint Venture (6,126) (8,800)

Investments in movie productions (1,361) -

Acquisition of property, plant, and equipment (68,105) (30,637)

Proceeds from disposal of property, plant, and equipment - 7,752

Net cash flows used in investing activities (75,592) (31,685)

Cash flows from financing activities

Repayment of bonds and loans (4,033) (21,132)

Proceeds from Bonds & Loans 75,000 -

Proceeds from Government grant - 7,000

Proceeds from other borrowings 728 -

Net cash flows from financing activities 71,695 (14,132)

Net (decrease)/increase in cash held 19,086 (7,928)

Cash and cash equivalents - at the beginning of the year 19,007 26,935

Cash and cash equivalents - at the end of the year 5 38,093 19,007

The above cash flow statement should be read in conjunction with the accompanying notes.


statement of cHanges in capital & reserVes for tHe year enDeD 31 DecemBer 2005

Capital Asset Asset Retained Total Contributions Revaluation Replacement Profits Reserve Reserve $’000 $’000 $’000 $’000 $’000

Balance at 31 December 2003 25,810 162,993 10,000 131,341 330,144

Movement in reserves 1,837 - - - 1,837

Net (loss) for the year - - - (6,603) (6,603)


Surplus on assets revalued during the year - 74,200 - - 74,200

Movement in reserves 4,684 - - - 4,684

Net (loss) for the year - - - (1,551) (1,551)


The above statement of change in capital and reserves should be read in conjunction with the accompanying notes.


notes to anD forming part of tHe financial statements for tHe year enDeD 31 DecemBer 2005

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The principal accounting policies adopted in the preparation of these financial statements are set out below: (a) Basis of preparation The financial statements have been prepared in accordance with Fiji Accounting Standards.

The financial statements have been prepared under the historical cost convention and except where stated do not take into account current valuations of non-current assets. Unless stated otherwise, the accounting policies are consistent with those of the previous year. The preparation of financial statements in conformity with the generally accepted accounting principles require the use of estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense during the reporting period. Although these estimates are based on management’s best knowledge of current events and actions, actual results ultimately differ to those estimates.

(b) Revenue recognition Electricity Income Electricity income is recorded in the income statement on an accrual basis by estimating the usage for customers to 31 December 2005.

Other Income

Rental income earned from leasing FEA properties is recorded in the income statement on an accrual basis.

(c) Receivables Provision for any doubtful debt is based on a review of all outstanding amounts at year end. All known bad debts are written off in the period they are identified (d) Cash and cash equivalents

Cash and cash equivalents are carried in the Balance Sheet at cost. For the purposes of the cash flow statement, cash and cash equivalents comprise cash on hand, short term deposits held with banks and bank overdrafts.

(e) Inventories Inventories are stated at the lower of cost and net realisable value. Cost is based on the 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. (f) Property, plant & equipment 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.


notes to anD forming part of tHe financial statements for tHe year enDeD 31 DecemBer 2005

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Depreciation rates Depreciation is calculated on the straight line method to write off the cost or revalued amount of each asset over their estimated useful lives as follows: Rates Land improvement 1.25% Buildings - Concrete 1.25% Buildings - Others 1.25% Hydro Assets - Dams 1.33%-2.50% - Tunnels 1.33%-2.44% - Plant & machinery 2.50%-3.00% Thermal assets 4.00%-7.00% Transmission 2.50% Communication system & control 2.86%Reticulation 4.00%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 sparesCapital 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. Valuation In 2005, FEA engaged through expression of interest an independent valuer Beca Carter to undertake valuation of its plant and equipment using the Discount Cash Flow method. The revaluation exercise resulted in an upward valuation of plant and equipment to the quantum of $74.2 million. Land and buildings were not revalued during the year. The Authority has a policy to revalue its property, plant & equipment every 5 years. Disposals Gains and losses on disposals are determined by comparing proceeds with carrying amounts and are included in the operating profit. Repairs and maintenance Repairs and maintenance are charged to the income statement during the financial period in which they are incurred. The cost of major renovations is 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.


notes to anD forming part of tHe financial statementsfor tHe year enDeD 31 DecemBer 2005

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(g) Leased assets The Authority has acquired motor vehicles 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.

(h) Land titles Capital expenditure incurred on the acquisition of land and all assets at Monasavu were expended by the Authority but the land titles are held by Government.

(i) Asset replacement reserve The Authority has established an asset replacement reserve to provide in a structured way for damage to assets not covered by external insurance. In line with advice from the broker and the World Bank, the Authority has built this reserve to a sum of $10,000,000 which based on past experience, would be sufficient to cover two and one half times the value of any maximum single claim.

(j) Deferred income 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. (k) Taxation The Authority adopts tax effect accounting using the liability method. Under this method the income tax charge is directly related to the accounting profit for the year after adjustments for permanent differences in respect of non- taxable income or non-deductible expenditure.

(l) Investments Interest 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 income statement reflects the share of the results of the operations of the jointly controlled entity.

Investment in movie productions are initially recorded at cost and are valued at a value expected to be recovered from the exploitation of the copyright in accordance with the Production Investment Agreement.

(m) 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 therefrom (realised and unrealised) are brought to account in determining the profit or loss for the year.




(n) 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 service provided up to the balance date and is calculated based on current rates of wages and salaries. iv) Retirement benefit The liability is determined by the conditions of employment, service provided up to the balance date by the employees and is calculated based on current rates of wages and salaries and is payable upon retirement of the employee.

(o) Segment information The Authority is not required to report segment information in accordance with FAS 14 as it is not applicable to the nature of the Authority’s business. Whilst electricity revenue is distinguished by key business 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 business segments, and it is not possible nor practical to attempt to allocate costs across the business segments. The Authority’s power system and retailing are operated on a fully integrated basis.

(p) 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. 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 income statement, unless the relevant asset is carried at fair value, in which case the impairment loss is treated as a revaluation decrease.




(q) Bond instrumentsThe bonds issued are recorded at cost which reflects the face value of these instruments.

Transaction costs on the issue of bonds instruments are capitalised and amortised to the income statement 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 instrument and which would not have been incurred had those instruments not been issued.

(r) Capital contributionNon refundable capital contribution represents 75% of the costs 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 mains 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 of 75% of the cost of the extension which is credited to capital contribution.

(s) 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.

(t) Rounding off amounts Amounts in the financial statements have been rounded off to the nearest thousand dollars unless specifically stated to be otherwise.

(u) Comparative figures Where necessary, comparative figures have been adjusted to conform with changes in presentation in the current year. (v) Reporting currency All figures are reported in Fiji currency.



2005 2004 $’000 $’000

2. OPERATING REVENUE

ELECTRICITY SALES Commercial 62,226 50,463

Industrial 31,833 34,098

Domestic 40,105 35,663

Others 2,173 2,118

136,337 122,342

OTHER REVENUE Contract sales 610 1,593

Deferred income 856 722

Service and licence fees 514 215

Sales and commissions 336 296

Street light maintenance charges 1 1

Rentals 37 26

Power pole rentals 509 568

Training rebates 36 39

Insurance proceeds 1,516 1,073

Loss on disposal of fixed assets - (41)

Government grant - 411

Fuel rebates & concession 1,220 3,835

Project development fees & other services - 1,182

Unrealised exchange gain/(loss) 86 -

5,721 9,920

TOTAL REVENUE 142,058 132,262



2005 2004 $’000 $’000

3. OPERATING PROFIT

(a) Operating profit before tax has been determined after: Crediting as revenue

Interest income 1,189 762

Charging as expense Auditors’ remuneration for auditing services 36 36

Fees for other professional services 26 34

Bad debts - 467

Directors’ fees 39 39

Loss on disposals of property, plant and equipment - 41

Provision for :

- sick leave (237) (13)

- annual leave 5 (129)

- long service leave (74) (22)

- retirement benefit (155) (127)



2005 2004 $’000 $’000 4. INCOME TAX EXPENSE

The prima facie income tax on the pre-tax profit reconciles to the income

tax in the income statement as follows:

Operating profit before income tax 1,243 9,306

Prima facie income tax payable at 31% 385 2,883

Tax effect of permanent differences

- Depreciation 2,638 2,018

- Audio Visual Production investment incentive (633) -

- Audio Visual Production investment write-down 195 -

- Other (1,121) (1,755)

Carried forward tax losses forfeited - 6,163

Recognition of tax losses 500 -

Timing differences not brought to account in prior years now been recognised 7,430 -

Income tax provision in relation to prior periods (6,600) 6,600

Income tax expense attributable to operating profit 2,794 15,909

Income Tax Movement

Income tax expense comprises movements in:

Provision for income tax (6,600) 6,600

Provision for deferred income tax 13,237 9,620

Future income tax benefit (3,843) (311)

2,794 15,909

In 2005, the Authority obtained tax legislative approval from the Parliament granting FEA tax exempt status

to 31 December 1996.



2005 2004 $’000 $’000 5. CASH AND CASH EQUIVALENTS

Short term deposits 38,083 16,000

Cash at bank and in hand 10 3,007

38,093 19,007

The interest rates on short term deposits range from 2.15% to 4.0% per annum.

An overdraft facility of $7,491,000 exists with ANZ bank. At balance date this facility was not utilised

(2004 : $nil)

6. RECONCONCILIATION OF OPERATING ACTIVITIES

Operating loss after income tax expense (1,551) (6,603)

Adjustments for: Depreciation and amortisation 24,304 20,260

Provision for investment diminution 629 -

Provision for leave entitlement (461) 291

Income from joint venture (263) (6)

Income from capital grant (3,354) (722)

Changes in assets and liabilities: (Increase)/decrease in trade and other receivables (878) 5,289

(Increase)/decrease in inventories (3,457) (1,455)

(Increase)/decrease in future income tax benefit (3,843) (312)

(Increase)/decrease in trade and other payables 5,220 4,927

(Increase)/decrease in income tax provision (6,600) 6,600

(Increase)/decrease in deferred tax liability 13,237 9,620

Net cash provided by operating activities 22,983 37,889



2005 2004 $’000 $’000 7. RECEIVABLES AND PREPAYMENTS

Electricity debtors 13,763 11,552

Other debtors 2,404 4,437

Advance to Joint Venture 8,914 2,787

Prepayments 2,129 2,235

27,210 21,011 Provision for doubtful debts

- Electricity debtors (380) (380)

- Other debtors (150) (150)

Total Receivables and Prepayments (net) 26,680 20,481

The terms of trade for electricity debtors are 14 days from the date of billing.

The advance to the Joint Venture company, Sustainable Energy Limited (SEL), includes capital contributions

by FEA and development costs incurred by FEA for each project. Capital contributions will be converted to

equity on the completion of each project and development costs will be repaid to FEA.

8. INVENTORIES

Consumables 14,817 11,360

Provision for obsolescence (850) (850)

13,967 10,510



2005 2004 $’000 $’000

9 . PROPERTY, PLANT AND EQUIPMENT Leasehold land, buildings and improvements

At cost/valuation 67,119 67,119

At cost - 2005 14,716 -

Accumulated depreciation (9,846) (8,943)

71,989 58,176

Dam, tunnels, and water intake At cost/valuation - 212,513

At valuation - 2005 171,107 -


166,933 116,268

Plant, equipment & transmission asset At cost/valuation - 370,601

At valuation - 2005 209,948 -

At cost - 2005 10,712 -


203,062 189,862

Furniture & fittings At cost/valuation - 14,022

At valuation - 2005 11,304 -

At cost - 2005 125 -


2,758 4,128

Motor vehicles At cost/valuation 2,281 2,255

At cost - 2005 2,785 -

Accumulated depreciation (1,713) (963)

3,353 1,292

Capital spares 4,151 4,250

Capital works in progress 52,813 11,572



2005 2004 $’000 $’000

9. PROPERTY, PLANT AND EQUIPMENT (continued)

Total

-At cost/valuation 69,400 682,332

-At valuation - 2005 392,359 -

-At cost - 2005 85,302 -

-Accumulated depreciation (42,002) (296,784)

Closing net book value 505,059 385,548 Reconciliation of the carrying amounts of each class of property, plant & equipment at the beginning and

end of the current financial year is set out as follows: Leasehold Plant, Land, Dam, Equipment& Buildings& Tunnels, Transmission Furniture& Motor Capital CapitalWork Improvement WaterIntake Assets Fittings Vehicles Spares InProgress Total $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000Opening net

book value 58,176 116,268 189,862 4,128 1,292 4,250 11,572 385,548

Additions 10,938 - - - 2,785 298 55,594 69,615Revaluation - 54,840 19,280 80 - - - 74,200Transfers 3,778 - 10,712 125 - (262) (14,353) -Depreciation charge (903) (4,175) (16,792) (1,575) (724) (135) - (24,304)

Closing net 71,989 166,933 203,062 2,758 3,353 4,151 52,813 505,059book value

The receivers for the Land Developers at the Navutu Industrial development have yet to issue land titles for land purchased by the Authority.

Due to claims arising out of legal action in respect of the Authority’s acquisition of land at Kinoya, the land title has not yet been legally transferred to the Authority.

The Authority and the 12 Monasavu Mataqalis signed a Deed of Settlement on 10 May 2006 ending the long-standing dispute between the two parties. Simultaneously, the Authority and the Native Land Trust Board (NLTB) signed an agreement to lease approximately 23,000 acres of the Monasavu catchment area from the NLTB and the Landowners in return for specified payments over a period of 99 years as detailed in the agreements. This brings the existing dispute with Monasavu Landowners to an end and allows the Authority to further develop electricity generation projects in the catchment area. The High Court endorsed the agreements on 10 May 2006.

As a result, the Authority has capitalised the amount of $10,938,000 to leasehold land which includes the premium payments agreed with the Landowners and the NLTB, and legal fees associated with obtaining the lease for the land.



2005 2004 $’000 $’000 10. LOANS

Sustainable Energy Limited 10,895 10,088

The loans to the joint venture company are to be repaid over 10 years at an interest rate of 7.5% per annum.

The loans are secured by debentures over the assets and undertaking of the joint venture company.

11. INVESTMENTS

Equity accounted investments in Joint Venture 269 6

Available for sale investment:

Investment in Movie 1,361 -

Less: Provision for write down in movie value (629) -

Total Investments 1,001 6

The Authority holds a 50% share in the Joint Venture Company, Sustainable Energy Limited (SEL), a company

that is incorporated in Fiji. At balance date, the issued and paid-up capital of SEL was $100.

12. TRADE AND OTHER PAYABLES Current

Trade creditors 677 2,692

Other creditors and accruals 9,148 7,530

Accrued interest 923 685

Customer deposits 4,360 3,705

15,108 14,612 Non- Current

Customer deposits 11,585 10,033

13. PROVISION FOR EMPLOYEE ENTITLEMENTS

Sick leave 33 270

Annual leave 990 985

Long service leave 1,058 1,132

Retirement benefits 3,763 3,918

5,844 6,305

Current 1,023 1,255

Non-current 4,821 5,050

5,844 6,305



2005 2004 Employee numbers Number Number

Number of full-time equivalent employees as at 31st December 575 595 14. BORROWINGS 2005 2004 $’000 $’000

Current

Bonds (a) 6,100 4,000

Term loan (b) 28,760 33

34,860 4,033

Non-Current

Bonds (a) 74,700 50,800

Term loan (b) 21,775 5,535

96,475 56,335

Total 131,335 60,368 (a) Bonds The Authority’s bonds are issued in competitive tenders. The Reserve Bank of Fiji offers, manages and carry

out registry services on behalf of the Authority. The bonds are recorded at cost which reflects the face value

of the bonds.

The maturing terms of the Bonds range from 3 to 15 years, whilst the interest rates vary from 3.01% to

10.25% per annum. The Bonds are guaranteed by the Government of Fiji.

(b) Term loan

The term loan from the Suva City Council attracts interest at the rate of 3.00% per annum and the loan

matures on 25 July 2065.

Other term loans range from 1 to 5 years at interest rates between 3.40% and 4.25%.

On 18 August 2005, the Cabinet of Fiji passed a resolution that the Government will guarantee Fiji Electricity

Authority’s loans of up to $230 million to fund its capital programme.



2005 2004 $’000 $’000 15. OTHER BORROWINGS

Loan from movie production company 728 -

The above loan is interest free and is a non recourse loan that will be paid out of the Authority’s income

from the exploitation of the copyright of the movie.

16. DEFERRED INCOME EEC grant in aid

EEC grant in aid 12,330 12,330

Less : accumulated amortisation (3,398) (2,100)

Closing Balance - 31 December 8,932 10,230

Government Grant for Rural Electrification Government Grant for Rural Electrification 9,342 9,342

Less : accumulated amortisation (2,429) (373)

Closing Balance - 31 December 6,913 8,969 Total 15,845 19,199

The treatment of deferred income is in accordance with the policy set out in note 1(j) to the financial

statements. Refer note 17 for prior year adjustments.

17. PRIOR YEARS DEFERRED INCOME During prior years, the EEC grant of $12.330 million and Government grant of $9.342 million (Refer Note 16)

were not systematically amortised over the expected lives of the assets to which the grants relate.

The prior year impact of $2.498 million was adjusted in the current financial year in the income statement

in accordance with Fiji Accounting Standard as Correction of Fundamental Error - prior years deferred

income. The amount of correction relating to each period is given in the table below:

Financial year Amount $’000 1999 332

2000 508

2001 508

2002 508

2003 508

2004 134

2,498

Comparative financial statements have not been restated and the financial impact of the above has been

incorporated in the income statement for the year 2005.



18. CONTINGENT LIABILITIES

(a) Kinoya Land The legal action in respect of the Authority’s acquisition of land at Kinoya has resulted in the High Court

awarding $1.7m to the plaintiff. The Authority has paid this amount to the Court’s Trust Account but is

appealing the decision requesting for a change from applying compound interest to simple interest.

The plaintiff is also appealing to seek an increase in the quantum by requesting allowances for lost rent and

profit. There is significant uncertainity on the outcome of the appeal.

(b) 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. The

Authority has not provided any indemnity guarantee to third parties.

(c) Contingent liabilities exist with respect to the following: 2005 2004 $’000 $’000

Letter of credit 22,509 542

Immigration bond 28 28

Other litigation 313 -

22,850 570

19. 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; 989 1,902

Payable later than one year but not later than two years; 389 1,319

Payable later than two years but not later than five years. 286 225

1,664 3,446



2005 2004 $’000 $’000 19. COMMITMENTS b) Native and Crown leasehold land

Payable no later than one year; 3,102 188

Payable later than one year but not later than two years; 1,712 188

Payable later than two years but not later than five years; 5,137 564

Payable later than five years. 74,520 11,993

84,471 12,933 TOTAL COMMITMENTS 86,135 16,379

The Native and Crown leasehold land includes the recent lease obtained for

Monasavu land. The settlement signed with Monasavu land owners and the

Native Land Trust Board commits FEA to the following future payments:

Payable no later than one year; 2,310

Payable later than one year but no later than two years; 920

Payable later than two years but not later than five years; 2,760

Payable later than five years. 55,980

20. CAPITAL EXPENDITURE COMMITMENTS

Capital expenditure contracted for at balance date but not

otherwise provided for in the financial statements. 24,444 4,431

21. RELATED PARTY TRANSACTIONS

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:

Revenue government grants - 411

The Government of Fiji also provide guarantees on the bonds issued by the

Authority.

22. PRINCIPAL ACTIVITIES 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.


1997 1998 1999 2000 2001 2002 2003 2004 2005Units Generated from Wailoa Hydro (MWh) 402,009 417,106 447,771 412,097 460,610 448,253 343,655 357,279 322,489Units Generated from Wainiqeu Hydro (MWh) 1,806 816 2,079 2,286 2,347 1,945 74 1,159 1,099Units Generated from Wainikasou Hydro (MWh) Commissioned in 2004 8,919 15,151total Generation from Hydro (MWh) 403,815 417,922 449,850 414,383 462,957 450,198 343,729 367,357 338,739Units Generated from Diesel VLIS (MWh) 15,538 51,148 45,087 75,905 69,638 117,763 244,848 241,084 304,863Units Generated from Diesel Others (MWh) 30,523 33,557 33,524 33,606 36,879 35,738 39,773 41,105 41,169total Generation from diesel (MWh) 46,061 84,705 78,611 109,511 106,517 153,501 284,621 282,189 346,032total Generation from solar Panel (MWh) 2 12 9 11 14 10 9 6 2total Generation (MWh) 449,878 502,639 528,470 523,905 569,488 603,709 628,359 649,552 684,773 made up of: Total VLIS Generation (MWh) 417,547 468,254 492,858 488,002 530,248 566,026 588,513 607,283 642,505Total Other Generation (MWh) 32,331 34,385 35,612 35,903 39,240 37,683 39,846 42,269 42,268Station Auxilliary Usage (MWh) 6,532 10,677 9,926 12,777 6,473 4,815 6,777 6,144 7,294Auxilliaries as a % of Total Generation 1% 2% 2% 2% 1% 1% 1% 1% 1%% contribution from Hydro Generation 90% 83% 85% 79% 81% 75% 55% 57% 49%% contribution from diesel Generation 10% 17% 15% 21% 19% 25% 45% 43% 51%% increase in Hydro Generation 11% 3% 8% -8% 12% -3% -24% 7% -8%% increase in Diesel VLIS Generation -64% 229% -12% 68% -8% 69% 108% -2% 26%% increase in Total Diesel Generation 31% 84% -7% 39% -3% 44% 85% -1% 23%% increase in Total Generation 12% 12% 5% -1% 9% 6% 4% 3% 5%Monasavu Maximum Dam Level (MSL) 745 745 745 745 745 736 733 737 735Monasavu Minimum Dam Level (MSL) 737 723 729 742 718 718 714 719 721

GeneRation statistiCs (eXCludinG indePendent PoWeR PRoduCeRs)

distRiCt 132kV o/H line (km) 33kV o/H line (km) 33kV u/G Cable (km) substations transformer MVa 2004 2005 2004 2005 2004 2005 2004 2005 2004 2005Wailoa 1 1 105 105Wailoa - Vuda 78 78 2 2 98 98Vuda - Pineapple Corner A 8 8 1 1 1 1 30 30Vuda - Rarawai 32 32 1 1 10 10Rarawai - Vatukoula 19 19 1 1 10 10Vatukoula - Tavua 4 4 2 2 1 1 5 5Vuda - Waqadra A 16 16 1 1 40 40Vuda - Waqadra B 11 11 2 2 Waqadra - Sigatoka 59 59 2 2 7 7Sigatoka - Korolevu 29 29 1 1 5 5Vuda - Rarawai Tee-off to Pineapple Corner 2 2 1 1 Wailoa - Wainikasou 29 29 10 10Nagado - Sabeto 10 3total 78 78 209 219 6 6 11 11 320 323

tRansMission and suB-tRansMission netWoRK - WesteRn

oVeRHead lines (km) undeRGRound CaBles (km) suBstations installed kVadistRiCt High Voltage low Voltage High Voltage low Voltage 31/12/04 31/12/05 31/12/04 31/12/05 31/12/04 31/12/05 31/12/04 31/12/05 31/12/04 31/12/05 31/12/04 31/12/05Nadi -Tavua 1,123 1,144 1,703 1,746 149 150 65 66 1,588 1,611 124,280 130,650Sigatoka 278 296 466 475 4 4 5 5 315 329 18,202 19,341Savusavu 84 85 62 63 4 4 1 1 89 91 4,118 4,368Labasa 354 361 661 672 12 12 3 3 318 330 19,539 20,226Rakiraki 136 136 169 169 3 3 1 1 119 119 5,183 5,283total 1,975 2,022 3,061 3,125 172 173 75 76 2,429 2,480 171,322 179,868Increase 47 64 1.1 1 51 8,546% Increase 2% 2% 1% 1% 2% 5%

distRiBution netWoRK - WesteRn

distRiBution netWoRK - CentRal oVeRHead lines (km) undeRGRound CaBles (km) suBstations installed kVadistRiCt High Voltage low Voltage High Voltage low Voltage 31/12/04 31/12/05 31/12/04 31/12/05 31/12/04 31/12/05 31/12/04 31/12/05 31/12/04 31/12/05 31/12/04 31/12/05 Deuba 147 152 109 112 15 15 41 41 165 176 1,278 16,945 Lami 39 39 55 56 45 45 4 4 137 139 41,361 41,976 Suva 14 15 128 129 197 198 39 39 149 153 73,670 76,186 Kinoya 118 120 188 190 57 57 33 33 257 265 72,682 75,858 Nausori 194 199 244 252 17 17 1 1 346 358 37,796 37,939 Korovou 154 159 157 162 2 2 0 0 186 194 3,296 3,521 Levuka 19 19 24 24 1 1 0 0 32 32 5,232 5,232 Wailoa 11 11 6 6 0 0 0 0 10 10 196 196 total 696 714 911 931 334 335 118 118 1,282 1,327 250,511 257,853 Increase 18 20 1 0 45 7,342 % Increase 3% 2% 0% 1% 4% 3%

tRansMission & suB-tRansMission - CentRaldistRiCt 132kV o/H line (km) 33kV o/H line (km) 33kV u/G Cable (km) substations transformer MVa 2004 2005 2004 2005 2004 2005 2004 2005 2004 2005Wailoa - 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 15 15Cunningham - Hibiscus Park ‘A’ 7 7 1 1 20 20Cunningham - Hibiscus Park ‘B’ 5 5 Cunningham - Sawani 10 10 1 1 Vatuwaqa - Suva 5 5 1 1 45 45Kinoya - Vatuwaqa 4 4 Kinoya - Sawani 18 18 1 1 15 15Hibiscus Park - Wailekutu 6 6 1 1 5 5Hibiscus Park - Suva 3 3 Wailekutu - Deuba 38 38 1 1 5 5total 62 62 66 66 41 41 8 8 273 273


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“The new FEA is shown as customer caring by using the

softer more rounded FEA initials. Its commitment to renewable

energy is highlighted in its three waves represented by water (blue),

sun (golden), and other energy sources (green). The waves depict movement; wind and waves that generate clean environmentally

friendly renewable energy, converted to electricity. Above

the waves is a windmill with the sun shining through its centre,

symbolically showing additional sources for electricity. This is a

forward – looking FEA in motion, moving towards its ultimate goal of eventually providing

clean renewable energy in the foreseeable future.”

fiji electricity authority annual report...

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