The Utilities Regulatory Authority (URA) commission in July 2025 approved the Electricity Reliability Penalty Mechanism (ERPM) designed to improve electricity service reliability across the country. This mechanism enforces penalties on regulated electric utilities for unjustified service interruptions as defined by URA’s Electricity Reliability Standards.

The ERPM as supported by the existing legal framework provides a transparent, consistent, and non-discriminatory approach to penalize an electric utility. The ERPM utilizes a formula that considers the number of affected customers, duration of outages, and the base electricity tariff as determined by the URA to compute a penalty amount for non-compliance with URA established electricity reliability standards. Penalties collected from electric utilities will be deposited into a Government nominated public fund account. Furthermore, the URA ensures that penalties paid by the utilities are not recovered from electricity customers through tariffs.

Effective upon gazettal, the ERPM will be applied annually using utility data collected by the URA through mandatory Regulatory Reporting. Currently, there are only two electric utilities that will be affected by the ERPM; the Vanuatu Power and Water Authority (VANPAWA), and Vanuatu Utilities and Infrastructure Ltd (VUI). UNELCO has been excluded from the ERPM as their current Port Vila electricity concession contract already caters for a penalty mechanism to incentivize the utility to improve reliability.

The URA appreciates the cooperation of VANPAWA and VUI during the development of the ERPM and their commitment to improving reliability of their electricity services throughout their concession areas.