ECB awards NamPower 13.22% tariff increase

WINDHOEK: The Electricity Control Board (ECB) has awarded NamPower approval to increase the bulk electricity tariff by 13.22 per cent – from N.dollars 1.03 to N.dollars 1.17 – per kilowatt-hour (kWh) for the financial year 2014/15, effective 01 July this year.

In a statement issued to Nampa on Monday, ECB’s Acting Chief Executive Officer Rojas Manyame said as part of the review process leading to the approval of the tariff increase, the ECB analysed NamPower’s submission in accordance with the approval of the ECB Cost-Plus Tariff Methodology.

Manyame said the ECB closely scrutinised and made use of provisions of relevant documentations such as the White Paper on Energy Policy of 1998, and took into consideration expectations of key stakeholders including Government and the possible tariff impacts on the end consumer and the Namibian economy at large.

He said NamPower made an application to the ECB in terms of Section 27 of the Electricity Act, (Act 4 of 2007), requesting for an effective bulk tariff of 21.29 per cent, an increase from N.dollars 1.03 to N.dollars 1.25 per kWh, to meet its service delivery costs and for the tariff to remain cost reflective.

“The following reasons were provided and cited by NamPower to justify the request tariff increase: NamPower is pursuing various transmission and generation projects at present, all aimed at securing reliable power supply to Namibia in the short and long term; and NamPower remains forced due to trading obligations under the Supplement Agreement with Eskom to generate from high incremental cost thermal power stations, which include Van Eck, Paratus, Anixas and other new expensive imports, significantly contributing to high tariff increase requirements,” Manyame said.

He added that NamPower also reasoned that the proposed tariff increase makes provision for the year-on-year revenue requirement of NamPower, taking only actual costs and losses into account with no planned windfall gains for future investments, which is consistent with the cost-plus tariff methodology of Generation and Transmission set and approved by the Regulator.

Meanwhile, the ECB is expected to deliberate on the eventual increase to the consumers when the bulk suppliers such as municipalities and regional distributors apply for their annual increases from the electricity regulator.

SOURCE: NAMPA