Electricity regulator rejects NamPower’s bulk tariff increase application
The Electricity Control Board resolved that Nampower’s average tariff will not change and therefore will remain at N$1.65 per kilowatt-hour for the period 2020/2021, meaning that this financial year, there will be a 0% tariff adjustment.
The regulator agreed to this after NamPower submitted a tariff application for an effective bulk tariff increase of 3.9%, an increase from an average N$1.65 per kilowatt-hour to N$1.71 per kilowatt-hour for the 2020/21 year.
The Electricity Control Board rejected the application on the back of the struggling economy, which is severely affected by the Covid-19 pandemic, however, future tariffs are expected to increase in line with inflation and to cater for new generation as per the National Integrated Resource Plan. External factors such as the weather, foreign exchange fluctuation and other unforeseen circumstances will be taken into consideration.
The Electricity Control Board said in order to mitigate the impact of the tariff on consumers
and the economy, especially during times when the economy is struggling, they allowed an amount of N$50 million from the Long Run Marginal Cost fund.
The amount will be used by NamPower to supplement fuel costs for Van Eck and Anixas Power Plants or procure emergency energy if necessary.
Meanwhile, electricity distributors, including local authorities will individually apply to the regulator for a review of their tariffs. City of Windhoek confirmed that they are still awaiting the regulator to update the status of their separate tariff application.
“As part of the discussions with the Minister of Mines and Energy, the Ministry availed N$ 15 million through the National Energy Fund, to mitigate the potential impact of an increase on distribution tariffs,” the Electricity Control Board said in a statement.