PROPOSED ELECTRICITY HIKE: IT WILL BE 32 UNITS FOR E100, IF ...

MBABANE – For E100, consumers will now get only 32 units of electricity, that is if the 25.51 per cent tariff hike is approved on February 1, 2025.

Currently, for the same amount, domestic users of electricity are getting 42 units at E100. This is because Eswatini Electricity Company (EEC) has tendered a request to increase electricity tariffs to the regulator – Eswatini Energy Regulatory Authority (ESERA). EEC requested for an average tariff increase of 25.51 and 27.06 per cent for 2025/26 and 2026/27, respectively. This hike proposed by the utility, if approved, will result in the value of electricity units depreciating significantly in 2026. The proposed increment is against the backdrop of an 8.02 per cent tariff hike, which was implemented on April 1, 2024. The 2023/24 financial year tariff increase saw a downward spiral in the value of units, as E100 was at the time equivalent to 47 units of electricity.

Proposed

However, following the tariff hike, the value of the electricity units at E100 became equivalent to 42 and with the proposed two-year multi-year price determination (MYPD), for domestic users, if the proposed tariff hikes are approved, the same money will buy 32 units in 2025/26 and then in 2026/27, it will give a mere 24 electricity units. On the other hand, small commercial users for the same amount currently get 36 units. However, the units are accompanied by a E189 facility charge. With the proposed increment, their units will decrease to 28 units, while their facility charge will increase with E10 and tally to E199. In the subsequent year (2026), the value of units bought at E100 shall decline to 22, while the facility charge will increase to E280.

Meanwhile, for lifeline tariff customers, the amounts of units bought with E100 are currently 72; however, with the proposed 25.51 per cent, they shall decrease to 53 and when the proposed 27.06 per cent increase, if approved, is implemented in 2026/27, they shall decline further to 39. The projected value of units is to be determined by the input of the public and the findings of the regulator. This follows that as part of the process, ESERA will solicit input from the public and interested stakeholders, to incorporate into the review.

“The public and all interested stakeholders are, therefore, invited to submit their comments on the application for review by December 14, 2024,” said the ESERA Chief Executive Officer (CEO),  Sikhumbuzo Tsabedze. Tsabedze said the authority will further hold public hearings to gather comments on the review. He said members of the public and various stakeholders are encouraged to attend the public hearings. He said this when announcing EEC’s application for the tariff review, during a press briefing yesterday morning, held at the Mountain View Hotel. Tsabedze stated that EEC requests for a revenue requirement of E4 219 416 214 for the financial year 2025/26, and a revenue requirement of E4 570 140 772 for the financial year 2026/27.

“This translates to an average tariff increase of 25.51 per cent for the financial year 2025/26 and 27.06 per cent for the financial year 2026/27, excluding the 2.5 per cent electrification access fund levy and 15 per cent value-added tax (VAT),” said Tsabedze. In terms of Section 5 (1) (f) of the Energy Regulatory Act, read with Section 32 of the Electricity 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. The authority is expected to announce a decision not later than February 1, of the following year, after a three months’ review process. According to the tariff review proposal, this is to fully cover its costs for each of the financial years being applied for. Once approved by ESERA, the increases will be effected on April 1, 2025 and April 1, 2026 respectively.   

Deducted

EEC is requesting the regulator to consider a total of approximately E11.6625 million as an over recovery to be deducted in the upcoming years’ tariffs. The proposal is to spread these recoveries over the two-year application period as part of the revenue requirement. The utility mentioned through its proposal that currently, electricity prices do not cover the full costs of supplying electricity across the various tariff categories.  “This application, therefore, continues the migration to cost-reflective tariffs,” read the proposal in part. The company said it recognises the impact of tariff increases on the economy and households, especially the small businesses and the indigent. It said this tariff proposal considers the adoption of the subsidy framework by legislators, which includes an inclining block tariff for the company’s lifeline customers who are considered to be low-income consumers.

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