…wants EGENCO dissolved
…ESCOM says proposed tariff will be implemented in phases
Executive Director of Consumers Association of Malawi (CAMA) John Kapito has challenged the Electricity Supply Corporation of Malawi (ESCOM) to explain on the motive behind a proposed 69.7 percent electricity tariff hike.
ESCOM is proposing a 69.7 percent electricity tariff adjustment which according to its Chief Operations Officer, Maxwell Mulimakwenda, will enable the electricity supplier to advance its daily operations.
Mulimakwenda who was speaking on Monday during a public hearing on the proposal which was organised by Malawi Energy Regulatory Authority (MERA) in Blantyre, said the adjustment will be implemented in phases in the next four years and not just at once.
Mulimakwenda further explained that the proposed tariff adjustment will help the corporation to say goodbye to blackouts saying it will enable it to buy enough power from several power producers including from the Mozambican government.
“ESCOM in our role as a single buyer we make these applications on behalf of the whole electricity industry. We have not had tariff adjustment since March in 2021 although significant economic changes have happened.
“This 69.7 percent is in our view a very reasonable tariff hike proposal. Let me clarify that this proposed tariff is for the next four years, will be in phases. We need revenues to allow us to be buying power so that there is no loadshedding in the country,” said Mulimakwenda.
However, CAMA’s Kapito has a different view and has described the proposed 69.7 percent tariff adjustment as a huge burden pressed on Malawians whom he said never deserved it.
Kapito said his argument is on the basis that the supplier in 2018 proposed another tariff adjustment which has proved to be fruitless and added that he is only looking for a balance that whatever ESCOM is promising now, will be achieved.
He continued by encouraging stakeholders and Malawians to say no to the proposed 69.7 percent tariff adjustment saying the proposed increase will not benefit any consumer and said if the cooperation need an increase, it should never go beyond 46 percent.
“This application by ESCOM is coming at a time when we had another base tariff where ESCOM did not perform. So the argument is that what is it that they are demanding for when they failed to perform in the past?
“When you read their document presented to MERA, you will see that they are just playing with the mind of the consumer, they are not going to achieve anything. So they should either maintain whatever they had before with no tariff increase, or they should reapply and show all the key performance indicators and explain how they will achieve them. We must say no to this application. The maximum they can go is 46 percent,” reacted Kapito.
He then bayed for EGENCO’s blood arguing that the institution is just a waste of the taxpayer’s money and added that it is contributing to the exorbitant proposed tariff adjustment of electricity in the country.
Kapito was optimistic that dissolving EGENCO would minimise some expenditures thereby relieving Malawians from paying exorbitant electricity tariffs.
“The first application by ESCOM was about 99% and just by dissolving Power Market Limited (PML), the tariff has now gone to 69.7%. The more you take out EGENCO you will see that the tariff will come to 35%. What we are doing now is just funding institutions.
“We just need to collapse them and make one institution, the cost will be reduced. We have an EGENCO that is not adding value and we are saying let us have only one institution and they can have departments therein,” he added.
According to MERA Chief Executive Officer Henry Kachaje, the regulator will this Wednesday and Friday host similar public engagements in Lilongwe and Mzuzu respectively before settling for a better decision based on recommendations from these sessions.
The application for the tariff increase, will see electricity consumers in the country paying an average of K177.26 per kilowatt hour (kWh) from the current average of K104.46/kWh.
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