ECB Approves 13,22 Percent Tariff Increase

ELECTRICITY consumers must brace themselves for steep increases after the Electricity Control Board (ECB) has approved an effective 13,22% bulk tariff increment for power utility company NamPower for the financial year 2014-2015.

This will enable NamPower to sustainably provide for the future electricity needs of Namibia in the face of expected power shortages in the near future.

According to a statement by the acting chief executive officer of the Electricity Control Board (ECB), Rojas Manyame, yesterday, the tariffs increased from N$1,03 to N$1,25 per kWh and they are only applicable to NamPower bulk customers, while respective customers (distributors) will individually apply to the ECB for the tariff increases for the end user customers.

The approved tariff adjustment is effective on 1 July this year.

“The approved tariff increase will ensure that NamPower remains on the long run marginal costs path to enable them to build and maintain sufficient reserves to protect the Namibian consumer against price shocks in the future,” said Manyame, adding that it is important for ECB as a regulator to take a long term view and not only focus on the current year in order to ensure that the economy, the consumers and utilities are protected over the next number of years.

Namibia expects an electricity supply shortfall of 150MW after its contract with the Zimbabwe Electricity Supply Authority expires later this year.

Manyame however said an alternative supply has been secured from the Zambia Electricity Supply Corporation for the short to medium term.

“However, should there be any supply constraints from any of the suppliers, Namibia will be forced to buy energy on the emergency market from the region at emergency tariffs which are very high.

This will create price shocks on the economy if [the situation] is not properly handled,” said Manyame.

Manyame said Namibia currently imports between 50% and 70% of its energy requirements from the region depending on the availability of water for generation at Ruacana Hydro Power Station. Most of the generation plants under construction are only expected to start generating power after the year 2016.

The 30MW solar photo voltaic plant currently being procured from independent power producers (IPP) through a tender process, a 250MW plant to be developed by NamPower and an IPP and the crucial 800MW Kudu power plant are some of the generating plants under construction.

Manyame also said there was a need for Namibia to build power stations to address the power shortage gaps and enhance security of supply as soon as possible.

The medium tern expenditure framework has budgeted an amount of N$1.5 billion for the development of the Kudu power station, said Manyame.

He said the Ministry of Mines and Energy had made available N$150 million and the National energy fund N$20 million to NamPower to relieve consumers from high tariff increases.

This money will specifically be used to subsidise the fuel costs for the thermal power station at Van Eck and Anixas.

Source : The Namibian