Regulator: EDF and EPC’s Power Purchase Agreement “illegal”


Regulator Gisa Fuata’i Purcell says the establishment of EDF a French Solar Power Company in the Country was done illegally by the EPC board and the previous government. 

This is outlined in a letter the Regulator sent three months ago to the Minister of Communications, Toelupe Poumulinuku Onesemo, which spells out the alleged illegality of the ongoing solar panel project allowed through Cabinet directives bypassing Electricity laws in the country.

According to Gisa the EDF and EPC did not comply with the Electricity Act 2010. 

“Therefore, the EDF Power Purchase Agreement cannot be approved. “Furthermore, the EDF had not applied for a Generation License as per the Act.

The EDF operates In Samoa without the Regulator approving the appropriate tariff of the PPA and the PPA as well as issuing the generation license. 

“I recommend reviewing and replacing the Chairman and Board of EPC.

“We need people who have regard to the Electricity Act 2010 of the Government and people who are passionate to ensure the cost of living is affordable for the people of Samoa. “E le manaomia ni tagata e le amanaia le Tulafono, e soli Tulafono (which translates We don’t need people that disregard and violate the law). 

Radio Polynesia reached out to the Chairman of the EPC Pepe Christian Fruean for comments via email and Pepe’s response is printed verbatim below. 

“As per your email – this is the first time I have been made aware of the letter of 15 December, 2022 and am unaware of how or why it came to be made public in this way;

“As such, I intend to follow up with the Regulator to seek additional clarification and a better understanding of why I was not afforded a fair opportunity to be able to respond to the allegations at the time the letter was prepared. The principles of natural justice would allow a right of reply in this sort of situation and an opportunity to correct the factual inaccuracies that clearly exist.

“This is even more important as I have been named personally in the letter and a number of the Regulator’s allegations appear to be directed toward my personal integrity. This is very disappointing as I have always acted within my remit as Chairman of EPC consistent with the relevant governing legislations EPC Act 1980, Electricity Act 2010, Public Bodies (Performance & Accountability Act 2021, etc.) in order to deliver the best possible outcomes for EPC and the people of Samoa;

“I am giving further consideration to the letter, including why it was made public without being first afforded any opportunity to respond to the Regulator’s very serious and damaging allegations.”

According to the Regulator, the issue of the EDF goes back to 2020 in which the former Cabinet approved FK 20(44) based on the Tender’s Board advice, for EPC to go ahead with negotiating the EDF contract working closely with the Ministry of Finance (MoF), Office of the Attorney General (OAG) and the office of the Regulators (OOTR). 

However, the negotiations were only between the EDF and EPC without regard to the provisions of the Electricity Act 2010, that the Regulators approve the PPA and issue the license. 

The PPA was rejected by the Regulators at the time as EPC did not involve the Regulator in negotiations for the PPA. 

Therefore, the Regulator did not sign the PPA as per the provisions of the Act. However, the Cabinet issued the FK without any regard to the Act. EPC advised the Regulators that a Generation license must be issued as Cabinet has approved the signed PPA. 

“So basically, the Regulator rejected this project but the former Government approved it based on EPC’s advice and then signed the PPA without approval from Regulators per the Act.

“E solitulafono uma nei mea sa faia e le Chairman of the Board of the EPC and the former Cabinet. 

“It was after the PPA (not approved by the Regulators as per Act) was signed and approved by Cabinet that the License application was sent to the Regulators. It was in 2013 sa fai ai nei mea faasolitulafono.” 

The letter further states:

“On 1 December 2020, the Regulator wrote to EPC requesting to do the following adjustments to the EDF contract:

1 The feed-in-Tariff should be converted to WST

2 The tax component of the tariff must explicitly show VAGST

3 There should be a review period of 2 years for the PPA

4 The contract period should be 20 years instead of 30-50 years to be consistent with the terms of existing PPA’s and

5. To include an escalator portion of the tariff as the contract is already adjusted for inflation and exchange rate fluctuation without considering the tariff. Four of the above points raised by the Regulators were adjusted except for the term of the PPA.”

The Regulator in her letter further voiced rejecting the Government Guarantee of $150 million because of its impact on the national debt or reserves of Samoa. These are two main reasons why the Regulator did not support the EDF contract.

“During the EDF contract negotiations, the Regulator has never consulted yet the Chairman of the board advised the Government that the Regulator support the EDF application.”

The article has been amended to reflect the response by the EPC Chairman.