ECB approves 5% bulk tariff hike
The Electricity Control Board (ECB) has approved a 5% bulk tariff hike effective from 1 July, following a request by NamPower.
This increase means that the bulk tariff will increase from N$1.61 per kilowatt (kWh) hour to N$1.69.
NamPower applied for an increase of 6.56%, which would have seen the bulk tariff hiked to N$1.72 per kWh for the current financial year.
According to ECB CEO Foibe Namene, the 5% increase is below the projected inflation of approximately 5.3% for the 2017/18 period and it is therefore foreseen that the impact on inflation will be minimal.
Namene, said the ECB and the electricity supply industry is aware and concerned about the affordability of electricity in the country.
“It is a fact that the economy is highly dependent on reliable and affordable electricity supply. It is therefore the responsibility of the regulator to ensure a sustainable electricity industry at affordable tariffs.”
She added that the approved 5% increase would suffice for NamPower to cover its allowed operating costs.
The increase will also cover under-recovery, as per the reconciliation mythology and allow it to ultimately fulfil its financial obligations, including payments to the local independent power producers and ensure continued supply of electricity, said Namene.
According to her annual electricity tariff reviews are conducted to ensure that utilities charge appropriate tariffs to collect sufficient revenue to sustain a reliable and an efficient electricity supply industry, at affordable rates.
She said in reviewing the tariffs the regulator considers a number of factors. These include the impact of the tariff change on the electricity supply industry, the economy at large and the consumers.
“Consideration is further given to the national development plans, government policies and cabinet directives, such as the 2005 cabinet decision directing that NamPower tariffs should reach cost reflectivity by the year 2012 and remain cost reflective subsequently thereafter,” said Namene.
According to her as part of the review process, the ECB consulted different stakeholders through a stakeholder meeting at which NamPower made a presentation of its application. Stakeholders were requested to present their views, facts and evidence on the tariff application.
“Submitted comments were considered in the decision-making process leading to the tariff approval.”
The increase is applicable to NamPower bulk customers, such as regional electricity distributers, local authorities, regional councils and mines. The respective bulk customers will individually apply to the ECB for tariff increases that will be applicable to customers.
Namene said that consumers are likely to be informed about tariff increases through their various distributors after 1 July, when the NamPower tariff has been implemented. She, however, said this has to be communicated to consumers before it can be implemented.
Furthermore, the ECB has commenced with a National Electricity Tariffs Study to be completed by the end of this year. The study aims to better understand the distribution tariff structure at a national level and its relation to the cost supply of each distribution utility.
ELLANIE SMIT
This increase means that the bulk tariff will increase from N$1.61 per kilowatt (kWh) hour to N$1.69.
NamPower applied for an increase of 6.56%, which would have seen the bulk tariff hiked to N$1.72 per kWh for the current financial year.
According to ECB CEO Foibe Namene, the 5% increase is below the projected inflation of approximately 5.3% for the 2017/18 period and it is therefore foreseen that the impact on inflation will be minimal.
Namene, said the ECB and the electricity supply industry is aware and concerned about the affordability of electricity in the country.
“It is a fact that the economy is highly dependent on reliable and affordable electricity supply. It is therefore the responsibility of the regulator to ensure a sustainable electricity industry at affordable tariffs.”
She added that the approved 5% increase would suffice for NamPower to cover its allowed operating costs.
The increase will also cover under-recovery, as per the reconciliation mythology and allow it to ultimately fulfil its financial obligations, including payments to the local independent power producers and ensure continued supply of electricity, said Namene.
According to her annual electricity tariff reviews are conducted to ensure that utilities charge appropriate tariffs to collect sufficient revenue to sustain a reliable and an efficient electricity supply industry, at affordable rates.
She said in reviewing the tariffs the regulator considers a number of factors. These include the impact of the tariff change on the electricity supply industry, the economy at large and the consumers.
“Consideration is further given to the national development plans, government policies and cabinet directives, such as the 2005 cabinet decision directing that NamPower tariffs should reach cost reflectivity by the year 2012 and remain cost reflective subsequently thereafter,” said Namene.
According to her as part of the review process, the ECB consulted different stakeholders through a stakeholder meeting at which NamPower made a presentation of its application. Stakeholders were requested to present their views, facts and evidence on the tariff application.
“Submitted comments were considered in the decision-making process leading to the tariff approval.”
The increase is applicable to NamPower bulk customers, such as regional electricity distributers, local authorities, regional councils and mines. The respective bulk customers will individually apply to the ECB for tariff increases that will be applicable to customers.
Namene said that consumers are likely to be informed about tariff increases through their various distributors after 1 July, when the NamPower tariff has been implemented. She, however, said this has to be communicated to consumers before it can be implemented.
Furthermore, the ECB has commenced with a National Electricity Tariffs Study to be completed by the end of this year. The study aims to better understand the distribution tariff structure at a national level and its relation to the cost supply of each distribution utility.
ELLANIE SMIT
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