MPs caution against electricity hike
A joint committee of four parliamentary committees has called on Electricity Generation Company (Egenco) to put on hold its proposal for electricity tariff hike, saying Malawians are not ready for the hike.
Egenco was yesterday summoned by a joint committee of the parliamentary committees on Natural Resources and Climate Change, Public Accounts Committee, Legal Affairs, and Trade and Industry to explain a number of issues in the power sector, including power outages and tariff hike.
Egenco is seeking a 36 percent tariff hike to enable it cover its operations.
Co-chairperson of the joint committee Welani Chilenga said they are not comfortable with the proposed tariff adjustment of 36 percent.
“Malawians are going through hardships. Implementing the tariff hike will make Malawians suffer more than they already are,” he said.
Chilenga added that the joint committee will also engage Electricity Supply Corporation of Malawi (Escom), Power Market Limited (PML) and Malawi Energy Regulatory Authority (Mera) to suspend the proposed tariff hike.
During the meeting, the committee also asked when the power situation will improve, to which Egenco said the Kapichira Power Station will be at full capacity in three years time when they hope to complete the rehabilitation works.
Recently, Parliament passed the Emergency Power Project Loan Authorisation Bill to enable Malawi access about K62 billion to rehabilitate Kapichira Hydro Power Dam and the transmission system after it was damaged by Cyclone Ana.
The damage saw Malawi losing 129.6 megawatts (MW) on the national grid.
Egenco deputy director of Finance Delano Ulanje said the destruction of Kapichira Dam by Tropical Cyclone Ana heavily affected the power supply situation in the country.
He said by December this year, the power situation will have improved as Egenco will have restored over 50 percent of Kapichira Hydro Power Plant generation capacity.
In an interview after the meeting, Egenco assistant public relations officer Mervin Mchenga said the company has heard the plea and will go back and make a consideration and report back to the committee.
However, he said the proposed hike is to ensure that the tariff reflects the cost of generation.
“Nationally, the country is heading towards a cost-reflective tariff so that the tariff itself reflects a true cost,” said Mchenga.
On the blackouts, he said Egenco is working on restoring the power generation of Kapichira Hydro Power Station.
Mchenga said in the first phase, Egenco will construct a temporary dam that will help restore 50 to 75 percent of the power generation capacity by December 22 2022.
“It will certainly help in terms of the power situation because that will give us about 60 megawatts and above.
“So that will certainly help in terms of the power situation,” he said, adding Egenco has started works that will lead to restoration of power.
However, Mchenga said Kapichira Hydro Power Plant will be at full capacity in three years time when they hope to complete the rehabilitation works.
Players in the power sector are seeking a tariff adjustment to cover costs incurred in producing and distributing electricity. The stakeholders say the current end-consumer tariffs are on the lower side.
