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Mera stops Escom tariff hike

The Malawi Energy Regulatory Authority (Mera) has rejected a proposal by Escom to raise electricity tariffs by 18 percent.

The Electricity Supply Corporation of Malawi (Escom) proposed to implement the second phase of adjustment of 37.2 percent in electricity tariffs which Mera approved last year.

But Mera board shot down the implementation of the adjustment last week.

The Daily Times has learnt that the Mera board met last week to discuss Escom’s proposal.

Instead the meeting decided that Escom should be given performance targets first before its request to increase the tariffs can be considered.

“We met Tuesday [but] we did not approve until they meet certain targets. We sent it [the proposal] back until they meet certain targets,” said a Mera source, who opted for anonymity.

According to the source, one of the areas of concern by the board is load-shedding and other service delivery aspects.

“We will engage you [the media] shortly to know about the targets and what they have done and plan to do.

“We want to enhance accountability and performance. They [Escom] will not like it but that is part of the reform game,” disclosed the source.

In April last year, Escom implemented a 13.5 percent tariff hike.

Asked to comment on the matter, Escom Public Relations Officer Kitty Chingota said issues of tariff adjustment were Mera’s domain.

She, however, confirmed that the utility company started the process to have an 18 percent tariff hikes.

“We have triggered the process for a tariff hike for this financial year out of the approved 37.2 percent but a decision rests upon Mera to decide [the percentage] they can give us,” Chingota said.

She said in addition, Escom has asked Mera for a possible implementation of an automatic tariff system.

“There is provision for an automatic tariff adjustment when the economy reaches ‘certain’ trigger levels. Escom has just asked that in line with this provision in the Electricity Act, it should be given a go-ahead in this.

“Since the present economic condi t ions , the kwa cha situation and inflation have reached trigger levels, Escom has automatically applied for it,” she said.

She said Escom did not need to apply for the adjustment but Mera should have just ascertained the timing to approve the new tariff from the 37.2 percent as approved last year.

Escom was supposed to start implementing the second phase of the tariff adjustment by July this year.

The first phase of the tariff adjustment last year, which is being implemented in phases up to 2017, drew criticism and protests from stakeholders, including the Malawi Confederation of Chambers of Commerce and Industry (MCCCI) and the Consumers Association of Malawi (Cama).

Initially, Escom had asked Mera to approve a tariff increase of up to 58 percent, but were given 37.2 percent instead.

Last week, the country’s water boards; Southern Region Water Board (SRWB), Blantyre Water Board (BWB), Central Region Water Board (CRWB), Lilongwe Water Board (LWB), and Northern Region Water Board (NRWB) increased the price of water by up to 45 percent following government approval.

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