Malawi Energy Regulatory Authority (Mera) has approved implementation of a 12 percent electricity tariff increase, a third for Electricity Supply Corporation of Malawi (Escom) under its four-year tariff adjustment schedule.
Following the increase, consumers are now paying an average of K160.13 per kiloWatt-hour (kWh), up from the previous K142.98.
Mera acting chief executive officer Dad Chinthambi said Escom is required to submit to the regulator the schedule for new tariff charges for all customer categories.
He said: “Going forward, Escom is urged to strictly adhere to regulatory obligations as we implement the base tariff, one of which is timely submission of quarterly performance reports on the agreed key performance indicators [KPIs].
“I must mention that Escom has failed to submit reports on time as was agreed at the beginning of the base tariff implementation. This complicates the overall implementation process.”
Reacting to the approval yesterday, Consumers Association of Malawi (Cama) executive director John Kapito described the increment as unfortunate in the face of Escom failing to fulfil its KPIs that are key in helping the parastatal improve service delivery.
He said: “Until today, we have not seen any changes in the KPIs. We have argued with Mera and we will keep on arguing as well. The KPIs were also meant to ensure that they are also punished.
“When consumers face poor quality and meanwhile Escom is still getting whatever they were at the margin in the tariff tariffs, you can’t make sense out of it.”
Human Rights Defenders Coalition chairperson Michael Kaiyatsa agreed with Kapito and wondered why the tariff increase has been approved even though Escom has failed to submit its quarterly performance reports to Mera.
“Escom should only be allowed to raise tariffs if it meets clear targets and proves real improvements. These performance reports should also be made public so that consumers understand what they are paying for,” he said.
On his part, economist Christopher Mbukwa said just like fuel, electricity is a key input in the production of goods and services.
“As such, expect the adjustments to electricity tariff to be transmitted to many commodities. The timing could not be worse as the combined effect of the electricity and fuel prices would be harsh on most average Malawians,” he said.
Yesterday, Escom chief public relations and communication officer Pilirani Phiri conceded that customers are being subjected to a number of challenges including delayed faults resolution.
But he said the Escom board and management were aware that internal inefficiencies have also compounded the challenges.
Said Phiri: “Through the tariff hike, we expect to focus on addressing fault resolution delays by procuring necessary materials to ensure the tariff directly benefits our customers.
“To address these shortfalls, we assure our customers, stakeholders and the public that this tariff adjustment will be accompanied by rigorous measures to strengthen internal controls, optimise operations, and eliminate resource wastage.”
During a press briefing announcing the new tariff in Lilongwe yesterday, Chinthambi said it was only ideal to provide Escom with the resources as it was in financial stress.
He said: “We know Escom is facing so many challenges, but we keep engaging them. The pass through cost, coming from generation to the consumer, has been heavy on Escom.”
In August 2023, Mera approved and granted Escom a 50.8 percent base tariff increase for the four-year period from 2023 to 2027, implementing 18 percent in 2023 followed by 16 percent in February 2024 and 12 percent this time with the remainder to be implemented next year.
At the time, Mera said it would be monitoring Escom’s performance based on agreed KPIs.
The KPIs contained in Escom’s strategic plan for 2023 to 2027 include the target to increase the number of electricity connections from about 30 000 to 60 000 per year by 2024 and reduce the number of days for a new connection from 204 in 2023 to 120 by 2024.
In the 2023/24 financial year which ended in March 2024, the electricity supplier recorded a K49.6 billion loss.
