Mera against politicising Escom tariff hike proposal

Malawi Energy Regulatory Authority (Mera) has spoken out against politicising the Electricity Supply Corporation of Malawi (Escom) base tariff application, saying this is creating unnecessary panic among the public.

The power utility has applied to adjust tariff by 68 percent between 2018 and 2022, to make it operate effectively so that the tariff is cost-reflective.

Escom says the cost of producing electricity is high

A cost-reflective tariff means the amount customers pay for electricity cover the cost of producing and supplying power.

The assumption is that when consumers pay for the electricity used, the money goes towards maintaining, operating, improving the system and the nation benefits, which is not the case currently, according to some consumers.

But Mera officials argue that Escom and its sister company, Electricity Generation Company (Egenco), need revenue to buy power and expand access to electricity which they can only do if the electricity tariff is cost-reflective, and Mera has not approved any electricity tariff increase since the 58 percent adjustment request in December 2017.

The adjustment was phased with Escom effecting the last phase on July 1 when electricity tariffs rose from K46.30 to K48.80 kilowatt per hour (kWh) for households.

Speaking during a consultation meeting at Sunbird Mzuzu on Friday, Mera board chairperson Bishop Joseph Bvumbwe said stakeholders should desist from politicising the application by Escom, which he said is in the best interest of the nation.

He said: “Mera has not yet approved the application but the feeling out there is that the application has been approved. This is creating unnecessary panic among the public.

“The process will achieve a common good. We need to understand the basis on which the tariffs are set.”

Principal Secretary in the Ministry of Natural Resources Energy and Ministry Patrick Matanda agreed with Bvumbwe, saying a cost reflective tariff will attract Independent Power Producers (IPPs) in the energy sector.

“If investors are to come and invest in the power market, electricity tariffs have to be attractive. Currently, we are facing challenges in the power sector because of that. Investors will come in if the tariffs are reflective—can cover the cost of production and supply,” he explained.

However, in the wake of abuse of resources through misprocurement at Escom, some stakeholders at the meeting felt the 68 percent tariff adjustment application was unnecessary.

Parliamentary Public Accounts Committee representative Agnes Nyalonje said it is surprising that there is abuse of resources at the company which affects its operations.

“Why should consumers be punished because we want to attract investors [in the energy sector]?” she wondered.

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