In southern Africa, the Namibian Electricity Control Board (ECB) has endorsed public power utility NamPower’s application for electricity tariff increment, which will be effective as from 1 July 2016.
Last week, the ECB approved a 16.71% tariff increase from N$1.28 ($0.088) to N$1.49 ($0.103) per kWh, with the organisation’s CEO Foibe Namene, noting that roughly 8% of the approved increase is due to the depreciation of the Namibia Dollar against the US Dollar, reports local media the New Era.
It is reported that NamPower had initially requested an effective bulk tariff increase of over 31%, which would have resulted in an increase to N$1.68 ($0.11) per kWh (inclusive of generation and transmission) for the financial period 2016/17, to meet its service delivery costs and for the tariff to remain cost reflective.
Namene said: “This increase would suffice for NamPower to cover its allowed operating costs, keep the lights on and fulfil its financial obligations. The approved tariff adjustment is effective from 1st July, 2016.”
She further stated that the permitted increment was also meant to warrant that NamPower can sustainably provide for the future electricity needs of the nation. The increase is applicable to NamPower’s bulk customers, which includes regional electricity distributors, local authorities, regional councils and mines.
According to the New Era, respective bulk customers (distributors) will now individually apply to the ECB for tariff increases that will be applicable to electricity end consumers.
Considering NamPower tariff increase application
Namene explained to the media that the ECB took into account numerous factors when considering the application, including the N$50 million ($34.4 million) made available by the Ministry of Mines and Energy, through the National Energy Fund.
This amount is said to be made available to relieve consumers from high tariff increases thus contributing to the overall reduction of anticipated increases.
“The amount will be allocated to NamPower to cover part of the energy cost denominated in US Dollar currency to cushion the impact of the currency fluctuation to end users,” Namene explained.
Meanwhile, she stated that Namibia continues to import a large share of electricity, at times importing up to 70% of electricity requirements, from the Southern African Development Community region.