9 October 2016 Last updated at: 7:22 AM
MERA blocks Escom from hiking electricity tariffs
… says Escom already makes enough money to improve services
The Malawi Energy Regulatory Authority (MERA) has blocked Electricity Supply Corporation of Malawi (Escom) from implementing a hike of electricity tariffs arguing that the supplier is generating enough funds for its operations though its services are deteriorating.
The development comes at a time when the electricity supplier wanted to be allowed to hike tariffs by 8.9 percent.
In a statement signed by MERA board chairperson Joseph Bvumbwe, the energy regulator noted that in the financial year ending June 2016, Escom made enough money to support its operations even though the company faced challenges in providing reliable power to Malawians.
“In view of the observations made, MERA resolved that the implementation of Escom’s 8.9 percent Tranche Base Tariff increase due in 2016/17 financial year be deferred pending further investigation, analysis, and validation of Escom’s performance,” reads part of the statement made available to Malawi24.
According to MERA, further analysis of the supplier’s technical performance is key in demonstrating the extent to which Escom has translated its financial gains into tangible improvements of its system in order to ensure continuity and reliability of power supply to its customers.
MERA granted Escom the first tranche of electricity tariff hike of 13.54 percent that was effected on April 4 in the year 2014.
The year that followed, MERA also granted a hike of 13.73 percent in November out of the required 18.31 percent after getting satisfied with Escom’s performance.
However, the Consumer Association of Malawi (CAMA) has been faulting the hikes arguing that they do not reflect the quality of service Escom provides citing the persistent power shortage in the country.