Electricity regulator gives thumbs up to tariff hikes
Inflation is set to jump significantly in July following an almost 10% increase in the price of bulk electricity that comes into effect at the beginning of that month.
Namibia’s statutory regulatory authority, the Electricity Control Board (ECB) on Wednesday announced the approved adjusted NamPower bulk tariffs for the financial period 2015/2016, at a media briefing held in Windhoek.
Chief Executive Officer of the ECB, Foibe Namene, said that a bulk tariff adjustment of 9.53%, an increase from N$1.17 to N$1.28 per kWh will take effect as of 1 July.
“The approved effective tariff adjustment is intended to ensure that Nampower can sustainably provide for future electricity needs of the nation,” said Nameme fingering the state utility as the main culprit for the harsh increase.
Initially NamPower had applied for an effective bulk tariff increase of 13.20%, an increase from N$1.17 to N$1.32 per kWh to meet its service delivery costs and for the tariff to remain cost reflective.
Said the regulator, NamPower had justified the requested tariff increase to cover incremental costs of electricity supply from imports and local generating thermal power stations (van Eck, Paratus and Anixas), but after the tariff review process conducted by the regulator on the facts, regulatory rules and policies, the ECB analysed and reviewed the application, considered feedback from other stakeholders and decided that a 9.53% tariff increase would suffice. The increase made by the regulatory authority will be applicable to bulk customers. These include Regional Electricity Distributors (REDS), Local Authorities, Regional Councils and mines.
According to the ECB, the tariff increase will mean a rise in the cost of living and production with the potential to jeopardise job creation and poverty alleviation. “ It is therefore important that the ECB, as the regulator, takes a long-term view and ensures that its decisions are made on the backdrop of tough conditions prevailing in the economy at all times,” she added.
Meanwhile the significant shortage of energy in the southern African region has forced a number of Southern African Development Community (SADC) countries to increase their bulk tariffs. Bulk electricity tariffs awarded by regulators in the SADC region include MERA (Malawi) with 13.5%, LEWA (Lesotho) – 4.5%, SERA (Swaziland) – 11.7% and NERSA (South Africa) – 12.69%, however Eskom has applied for an additional 9.58%.
In her closing remarks Namene said electricity tariff in Namibia, just like in most other SADC countries, will continue to rise until enough generation capacity is available.
“However, the Electricity Control Board in consultation with the government embarked on two studies; the National Electricity Support Mechanism and a study to improve electrification of peri-urban and rural areas,” she added.