November 01, 2024
Economy

Electricity tariff hikes necessary– ECB

July 19, 2023
Electricity tariff hikes necessary– ECB

The Electricity Control Board (ECB) says tariff adjustments are necessary to ensure the security of power supply in the country.

 ECB Chief Executive Officer Robert Kahimise said the cost of having no power or blackouts supersedes the effects exerted by tariff increments.

"Let us acknowledge the reality because the cost of not having electricity is not even double or triple, but way above,” Kahimise said.

“We understand the increasing cost in all spheres of goods and services, what we are trying to balance off as a regulator is for consumers to receive adequate relief, therefore we are busy analysing the cost of unsaved energy which is N$30 per kilowatt hour, which is considered a huge loss. All in all, we cannot afford living without electricity, like we have seen from South Africa."

Weighing in, ECB General Manager for economic regulations Pinehas Mutota said tariffs are driven by operational costs which are necessary to run the business.

“So when calculations are done and it appears in a particular year that the financial standing can cover all costs then there is no need to adjust. Therefore, it is pivotal that cost inputs driving service delivery are met with increasing tariffs, as many of the factors are beyond our control. 

“Like we import electricity and this is done using foreign currency which weighs in our spending. But as soon as we have our own sufficient power generation capacity, we will see the price reducing or even stabilising," Mutota said.

It was further explained that high density rate and the area of coverage contribute to the price variance across the country. 

"You may find that the Erongo region rate may be lower due to high density in the supply of electricity than Nored although covering a large area. Erongo might have higher volume sales compared, while Nored may spend more in infrastructure in covering many areas, thus influencing its tariff fee structure," further explained Kahimise.

To quell concerns about escalating prices, Kahimise emphasised the importance of conducting yearly reviews to ensure consumers pay appropriate tariffs and not be overcharged.

These details were shared during the announcement of approved tariffs for various electricity distributors in the country, after having adjusted NamPower's bulk tariff by 8.9% pushing it from N$1.82 to N$1.99. The approved tariffs for ErongoRED are 9%, CENORED 7.6%, NORED 9.5%, Omaheke regional council 3.3%, Okahandja 7.3% and NamPower distribution 9.2%.

However, ECB noted that from 50 of the registered distributors, 37 have not applied for tariff adjustment, which includes local authorities, farmers associations, village and regional councils, whereas the majority are in the south. The southern part is still being haunted by NamPower due to escalated debt owing about N$500 million, out of the national debt of N$1.5 billion.

Meanwhile, the City of Windhoek submitted their application late requesting 14%, Kalkrand village council 25%, Keetmanshoop Municipality 8%, Mariental Municipality 9.9%, Osire Power 12.3%, Oshakati Premier 10% and RoshSkor Township.

"I advise the people of the South to entrust entities to distribute electricity because it will save the majority of who are under local authorities, village and regional councils from the current challenges where they cannot even afford to honour their financial obligations with NamPower. To be honest, they are incapable and not up to standard, and we have evidence of this," stressed the CEO.

 

 

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Last modified on Thursday, 20 July 2023 19:45
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