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Electricity tariff 11% up

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The Malawi Energy Regulatory Authority (Mera) has authorised the country’s power supplier, Electricity Supply Corporation of Malawi (Escom), to raise electricity tariffs by 10.62 percent from K94.43 per kilowatts per hour to K104.46 effective today.

The announcement was made in Lilongwe Monday, where Mera Consumer Affairs and Public Relations Manager Fitina Khonje indicated that the prices could have gone up in 2020 but did not, causing Escom to lose revenue.

Escom last increased electricity tariffs in October 2018 and was expected to effect another increase of the tariff in February 2020 but the planned increase was not implemented.

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“Continued non-implementation of this approved tariff has led to Escom losing revenues from February 2020 to date. The board has, therefore, resolved to have this revenue recouped by Escom within the next 16 months to the end of the current base tariff period in June 2022,” she said.

Khonje added that trends in exchange and consumer price index (CPI) rates necessitated the increase, adding that Mera hoped that, with the increase, Escom would improve service delivery.

The authority noted that, when tariffs were revised in February 2020, the Kwacha was selling at 743.81 to the United States Dollar while the CPI was at K122.6. By February 26, the two had changed to K787.85 and K128.6, respectively.

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She said Automatic Tariff Adjustment Formula (ATAF) application resulted in 5.75 potential upwards tariff adjustment but it was not implemented.

In addition, a 7.28 percent increase that the Mera Board approved in February last year was not implemented.

This, Khonje said, prompted the board to resolve that electricity tariffs would be increased by 5.72 percent as the ATAF and 4.9 percent as revenue-recouping by Escom.

“The aim is to reinstall the value of the tariff and secondly to enable Escom to recover what they have lost in between 2020 and 2021, having in mind that we should also enable Escom to execute its plans so that they deliver good service to the customer,” she added.

Consumers Association of Malawi Executive Director John Kapito has described the increase as unfortunate and unjustifiable because the tariff has been already the highest in the region.

“What I believe is that the reason the tariff has been increased is that they want to support and fund the newly established Malawi Power Limited,” he said.

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