Mera yet to move on power tariff hike

M

alawi Energy Regulatory Authority (Mera) says it is yet to engage the public on the 99 percent electricity tariff adjustment proposal for the period 2022 to 2026.

Electricity Supply Corporation of Malawi (Escom) Limited and Power Market Limited (PML) in August this year submitted the proposal to adjust the tariffs.

Mera consumer affairs and public relations manager Fitina Khonje said dates for public hearings on the proposal are yet to be set.

She could not indicate why it has taken about two months before conducting the hearings to have stakeholders  input in the proposed electricity tariff adjustment.

In an earlier interview, Khonje said public hearings are important in the tariff determination process so that the authority can arrive at a decision that takes into account both consumer interest and sustainability of the electricity sector.

But Escom public relations manager Kitty Chingota yesterday said further delays to approve new tariffs means the power utility will be operating at a loss.

“This [delay] means we [will] continue to operate in a situation whereby we cannot finance our operations,” she said yesterday in a written response via WhatsApp.

Former Escom chief executive officer Kandi Padambo, who is familiar with electricity pricing and supply issues, shared Chingota’s concerns, saying the delay to conduct public hearings will have negative implications on the electricity tariff adjustment proposal.

He said factors that affect the pricing of electricity in the country change according to economic circumstances and feared that by the time public hearings will be conducted the need for electricity tariff may not be the same as they are now.

Said Padambo:“Any delay is not healthy. The sooner they [public hearings] could be done the better. Our economic fundamentals are changing every day, so these public hearings should be held as soon as possible.”

Under the 2022-2026 Electricity Base Tariff Application submitted to Mera, the two firms want electricity tariffs hiked by 80.75 percent from the current K104 per kWh to K187.98 in the 2022-2023, which is the first year of implementation.

In the  year 2023-2024  the State utility firms proposed a K184.18 per kWh hike whereas in the 2024-2025 and 2025-2026 year the firms want a K210.59 per kWh and K249.15 per kWh increase.

Escom is on record as having said throughout the period of 2018-2022 base tariff and energy sales were below target due to, among other reasons, the drought experienced in the country between 2017 and 2019.

The corporation also said non-implementation of the phased tariff at the beginning of the base tariff period and automatic tariff adjustment mechanism (Ataf) affected them.

Under the 2018-2022 Escom Base Tariff Schedule, Mera in October 2018 approved a 31.8 percent base tariff for the four-year period.

The implementation of the base tariff was segmented into four annual tranches.