November 01, 2024
Economy

ECB: REDs not to blame for high electricity tariffs

October 03, 2023
ECB: REDs not to blame for high electricity tariffs

The Electricity Control Board of Namibia (ECB) has absolved Regional Electricity Distributors (REDs) of blame for the exorbitant tariffs that several Namibians are enduring.

The ECB says the high tariffs are due to generation and transmission costs, which account for over 70% of the overall price paid on electricity.

"We should first tackle the high cost involved in the generation and transmission of the electricity as it is the determinant of what consumers will have to pay, thus heavily disadvantageous to them," ECB Chief Executive Officer Robert Kahimise explained.

"We have heard concerns of lucrative remunerations and board fees as one of the reasons why REDs are charging more, however, that is not the case as such only amounts to around 3% of the total cost, while the larger chunk is gobbled by generation, transmission and distribution costs."

Consumers have decried increasing costs of electricity, citing that they are not getting value for their money. Some consumers have blamed REDs, asserting that they are playing a middleman role that increases the cost to sustain operations at the detriment of customers.

Thus, customers have been calling for the abolishment of REDs and to be allowed to be directly served by the national utility NamPower with the view of cutting costs.

In recent months, communities in the southern regions of Hardap and ||Kharas have been objecting to the establishment of a RED going by the name Southern Regions Electricity Distribution (SORED). This development has left many local authorities and regional leadership divided over the decision to either join or not. Some feel it will bring relief, while others feel it will push the cost of electricity high.

The ECB and the Ministry of Urban and Rural Development have echoed their support for the idea of a RED in the South. The support comes as the southern part of the country is debt-ridden with NamPower, forming part of a region that owes a staggering N$1.5 billion to the national utility.

"The situation in the South is worrisome and unsustainable," Kahimise said. He, however, noted that there is no difference with what the locals are paying. Therefore, with the establishment of the RED, we believe it will solve many of their problems they are facing, ranging from unsustainability and debt management."

Kahimise made these remarks in response to The Brief's queries on whether REDs are still a sustainable system and its viability looking at the economic outlook, including the public outcry.

 

 

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Last modified on Wednesday, 04 October 2023 16:20
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