‘It is important that customers honour their commitment of paying their electricity bills timeously’ – NamPower MD
Power utility, NamPower on Tuesday, said that it would suspend the electricity supply of defaulting regional and local authority distributors by 05 June, unless they settle their outstanding overdue amounts before the said date.
NamPower’s debt from its customers stands at N$1,5 billion, with an amount of N$842 million being overdue, while interest amounts up to N$74 million, according to the company.
It comes as the company’s Power Supply Agreements grant NamPower the right to disconnect the electricity supply of their defaulting customers as per the agreements, it said.
Speaking at a press briefing on Tuesday, NamPower Managing Director, Kahenge Haulofu, said that they re-introduced their Debt Collection Plan with a Debt Repayment Incentive attached to it, in which they communicated to defaulting customers and the steps the power utility plans to take if its customers do not settle their overdue accounts by the end of May.
He said that this was not the first time NamPower communicated about its Debt Collection Plan, adding that they have considered several options and feel they have come up with the most practical solution that will not negatively expose national infrastructure.
“The disconnection of electricity supply to defaulting customers is divided into stages 1-9. Stage 1 will result in an electricity suspension of 4 hours for one day in one week. Customers who fail to settle their debts will have these stages increased to cover an additional day each week until we reach stage 7 (in week 7) where there will be a disconnection of 4 hours per day for the week,” Haulofu said, adding that they will increase the electricity suspension number of hours by 2 additional hours a day each week up to a maximum of 8 hours a day during stages 8 and 9.
He also said that they had offered to waive interest charges on overdue accounts settled within 12 months, as well as to increase the payment terms of all customers from 14 days to 20 days from the date of invoice.
He added, “With the re-introduction of the Debt Collection Plan, we are offering the same again, and in addition an incentive to write off the interest portion of the outstanding debt accumulated over the preceding 12 months to customers who settle their outstanding amount in full on or before 31 May.”
“Defaulting customers include all customers in breach of settlement terms as per the Power Supply Agreements as well as those who have defaulted on the extended settlement arrangements in place. Whilst I acknowledge and applaud a few customers who have made an effort to bring their accounts up to date, most have not bothered to heed our pleas and their debts continue to escalate,” he added.
Moreover, the MD indicated that NamPower has always and continue to engage their customers on the issue of overdue accounts to enforce the collection of money owed to the power utility in line with the provisions of the Power Supply Agreements and their Credit Policy.
“To enable NamPower to continue delivering on its mandate, which is that of ensuring the security of supply to the nation, customers must honour their commitment of paying their electricity bills timeously.”
According to him, customers with electricity pre-paid meters will also be affected due to the power utility’s right to disconnect the supply of electricity at their substation feeding that local authority, including all defaulting customers falling in under the Regions Electricity Distributors (REDs).
Haulofu explained further that this has yet to yield the desired results as only a few customers have made an effort to honour the instalment arrangements or to pay their outstanding accounts and hence the re-introduction of the Debt Collection Plan.
Meanwhile, CENORED-Okahandja and the Lüderitz Town Council have made acceptable arrangements concerning their accounts, which resulted in their removal from the list of defaulters.
The likes of the Northern Regions Electricity Distributor (NORED) owes 23%, followed by the Municipality Rehoboth 10%, the City Of Windhoek – Groot Aub & Brakwater 9.7%, the Erongo RED 5.6%, and many others are among the defaulting NamPower customers.
Besides its locally generated electricity, NamPower imports electricity through the Southern African Power Pool via its Energy Trading System to complement supply and meet demand.
Furthermore, NamPower Chief Financial Officer, Michael Gotore, said that out of the combined N$1,5 billion debt, a total of N$712 million is what defaulting customers with overdue accounts are owing, with the addition of N$74 million in interest, whereas a total of N$842 million consists of the current outstanding balance for the month.
NamPower imports electricity through the Southern African Power Pool (SAPP) via its Energy Trading System to complement supply and meet demand. On average, NamPower presently imports between 60% and 70% of its energy requirement.
The power utility also has a 180 megawatts (MW) contract with Zambia to import electricity through the Zambezi Link Interconnector and 100 MW and 80 MW contracts with South Africa and Zimbabwe, respectively.