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DEFERRED EEC HIKE, CAR LICENCES RENEWAL KICK IN

25/05/2020 22:18:00 BY ASHMOND NZIMA

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MBABANE – The grace period is over. The deferred electricity hike, which was mainly meant to cushion companies and individuals from the impact of the coronavirus, kicks in next Monday (June 1). The increase was supposed to be effective April 1, 2020 but was frozen for two months.

‘The ‘honeymoon’ is over, as from next Monday, consumers will pay five cents extra for each electricity unit. General purpose and small commercial prepayment will each have to pay a facility charge of E208.46 per month, which is money the businesses have to pay before they can load units. The businesses will now buy units at E2.41 each.

Pre-payment

Small commercial pre-payment business will have to pay a facility charge of E416.93 per month and will also buy a unit for E2.41. Also included in the structure is the time of use (TOU) tariff which mainly caters big companies, including industries.
For domestic customers it means, they will now buy a unit at E1.80. This is a five cents increase from the current rate of 1.75 per unit. For E100 you will now receive about 55 units compared to the 57 on the current tariff.

“As a corporate citizen, EEC has made serious consideration on the economic challenges brought about by the pandemic. As the country’s economy slows down, trade flows are curtailed and movement is partial; EEC felt the need to put some measures in place to try and assist individuals and businesses that will be suffering the consequences of the economic crisis,” EEC had said in an earlier statement late in March.

EEC Head of Corporate Communications Khaya Mavuso yesterday confirmed that June 1 was the agreed date for increasing the tariffs and nothing had changed.

The Eswatini Energy Regulatory Authority (ESERA) approved the average tariff increase of 1.03 and 1.05 per cent for 2020/21 and 2021/22, respectively. The new tariff for 2020/21 to be implemented in six days’ time was expected to reflect an increase of six cents per unit if EEC implemented the maximum percentage allowed by ESERA.
The increment came after a break of about a year for consumers as in 2018, Cabinet, led by the Prime Minister, Ambrose Mandvulo Dlamini, had suspended tariff increments.

With the approved percentages, Chief Executive Officer of ESERA, Vusimuzi Mkhumane, had said in an effort to balance the approved revenue requirement, EEC would be allowed to adjust the tariffs within a range of 2.5 percentage points above and below average of the approved tariff increase for each year.

In essence, this means that from the 6.2 per cent tariff hike EEC had requested for domestic users, it was allowed to increase the tariff by a minimum of 1.03 per cent.
If EEC was to implement the minimum permitted by ESERA, a domestic user was going to pay E1.77 per unit. This is equivalent to a two cents increment.

The wait now is for the second leg of the tariffs in 2021/22 to be implemented in April 2021.
In the proposed increment that was sought by the EEC and was approved, a 6.2 per cent increase was for domestic customers while 5 per cent and 5.5 per cent was for small commercial (non time of use) and time of use customers, respectively.

Requirement

The electricity provider had based its request on a revenue requirement of E2.391 billion in 2020/21 and E2.793 billion in 2021/22.
Meanwhile, motor vehicle licences should be renewed by Friday. About two months ago, the Ministry of Finance, Treasury Department, had extended the renewal of Motor Vehicle licences ending March 31, 2020 to May 29 (this Friday) without attracting any penalties.

The Ministry had discussions with the National Road Council and the National Disaster Task Force for the transport industry and a budget was set aside to assist with a small subsidy to keep the industry going during this time. Also deferred was the renewal of trading and company licences by the Ministry of Commerce, Industry and Trade. Communications officer in the ministry Thabile Mdluli said the grace period would be up until June 30.

An economist, on condition of anonymity, conceded that the hike would derail most companies in distress, but felt there was nothing to be done if EEC felt another postponement could derail them. Consumer Association Chairman Bongani ‘Bhanyaza’ Mdluli felt the hike came early, as the people had not recovered from the difficulties caused by COVID-19.

“For us we would like to see another postponement. As we speak, people are losing their jobs and the hike comes as a double blow. There are a lot of uncertainties at this moment,” he stressed.