By Falles Kamanga
LILONGWE-(MaraviPost)-Malawi Energy Regulatory Authority (Mera) on Monday rebuffed Electricity Supply Corporation of Malawi’s (Escom) proposal to effect a 60 percent base electricity tariff increase between 2018 and 2022 and has instead, allowed the parastatal to increase the electricity charges by an average of 31.8 percent.
This means that electricity charges will increase by MK21.92 per unit [kilowatt hour (KwH)] from MK73.23 per unit to MK95.15 per unit.
Escom was asking for a 60 percent tariff increase of which 53 percent was to be implemented in the first year while the remaining seven percent was to be effected the next three years.
Mera Board Chairperson, Bishop Joseph Bvumbwe, said in the first year, the electricity supplier will implement a 20 percent average increase from October 1.
He said the decision was made following an assessment of the reasonableness of some key assumptions which were driving Escom proposed costs, legitimacy of the costs that needed to be passed on to consumers, in-built planned efficiency improvements and cost control measures.
“In the public understanding, it may not be right to effect the increase but when you look at the real cost of producing electricity, you would understand. The 20 percent will bring the tariff to where it should be for Escom to be able to provide the power on demand.
“You must also look at the regions, of course, the method of generating power differs from country to country but Malawi is still at the bottom when it comes to the tariffs, so even though we might not expect change right away, we hope that there should be change within a foreseeable future,” Bvumbwe said.
Mera Chief Executive Officer, Collins Magalasi, said Escom buys electricity power from Zambia, Mozambique, Agrekko and Electricity Generation Company and pays more than the money it retrieves from sales.
However, members of the public have received the news with outrage, saying there is no justification to increase electricity charges when they are still subjected to power outages.
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