EEC WANTS 21.31% ELECTRICITY HIKE

EZULWINI – Loading an electricity voucher of E100 could give one about 45 units, if the new tariffs envisaged by the Eswatini Electricity Company (EEC) will get the green light, as is.

Currently, a voucher of E100 begets about 52 units for domestic customers. The Eswatini Energy Regulatory Authority (ESERA) revealed yesterday that EEC had applied to increase tariffs by 21.31 per cent for the year 2023/4. The 21.31 per cent is an average multi-year tariff proposal to fully cover EEC’s costs for each of the financial years being applied for. If approved by the Eswatini Energy Regulatory, it will come into effect in April 2023. The consumer price index currently stands at 4.52 per cent, according to the most recent statement of the Central Bank of Eswatini. This, EEC said, would help the company to finance its E2.9 billion revenue requirement for the financial year 2023/4, and another of E3.4 billion for the following year 2004/5.

Meetings

In a meeting with the Editors Forum, ESERA Chief Executive Officer (CEO) Sikhumbuzo Tsabedze said the application by EEC would be tested on a series of consultative meetings with the consumers in all sectors. He outlined a stakeholder engagement programme, which is scheduled to cover all four regions of the country, beginning Saturday November 23 at the Siteki Hotel. Tsabedze explained that the 21.31 per cent proposed tariff hike was not inclusive of electrification access fund levy and Value Added Tax  (VAT) for each of the financial years under review. The VAT was introduced for business consumers in September this year.

Among those to be engaged on the envisaged increase in tariffs are business and domestic consumers; trade unions and consumer groups; cane growers associations; government ministries and others. “In terms of Section 5 (1) (f) of the Energy Regulatory Act read with Section 32 of the Energy Act, together with Section 5 and 6 of the Tariff Methodology, ESERA is mandated to undertake a review once the request is received by November 1, and is expected to announce a decision not later than February 1, of the following year, after a three months review process.”

Over the past two years, EEC had asked for E2.9 billion, but ESERA managed to give them E2.6 billion, after relevant consultations. “This means that in the 7.6 per cent they had asked for, the authority was able to give them 1.3 per cent for the 2022/23 year. The regulator had then also decreased the money by 1.227 per cent.” Tsabedze assured the editors that ESERA  did not approve applications willy-nilly, but took into consideration many factors to protect the consumers and ensure that the utility was able to meet its obligations.

Concerns

“We listen to all sides of the role players, including the concerns of the customers as well as the utility operator. It is only after such a process that we can state the percentage increase,” he said. The announcement came under a volley of questions from the editors who wanted to know if, by ESERA’s assessment of the economic situation, the nation would afford an increased tariff. The editors also wanted to know what ESERA was doing to ensure there were alternative sources of electricity generation to control the price increase. Tsabedze said in their engagements with EEC, they would ask for answers on the reasons for the increase. He said investments into alternative power generation were welcome, but must be made prudently to ensure they were not heavily capital intensive.

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