By Ludger Kasumuni,The Citizen Reporter
Posted Tuesday, December 24 2013 at 08:34
Posted Tuesday, December 24 2013 at 08:34
In Summary
- Tanzania Electric Supply
Company (Tanesco) claims that it would post a loss of Sh1.6 trillion ($1
billion), between October 2013 and December 2015, if its request to raise
power tariff by 90 per cent hits a snag. In its application submitted to
the regulator, Energy and Water Regulatory Authority (Ewura), Tanesco
wants a tariff increase of 90 per cent effective October, this year.The
proposed rise would be implemented within three years—from October 2013 to
1 January, 2015.
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Dar es Salaam. Electricity consumers will mark New Year with a heavy burden of meeting
energy costs in the wake of a steep increase in power tariffs announced
yesterday by Energy and Water Utilities Regulatory Authority (Ewura).
Ewura Director of Economic Regulation Felix Ngamlagosi, said yesterday
that tariffs had been increased by an average of 40 per cent for domestic
users, and the new rates would come into effect on January 1, 2014.
This means that domestic consumers – those who use up to 75 units of
electricity per month – will now pay Sh100 per unit, up from Sh60. Initially,
this group had those who used less than 50 units.
Those who consume anything above 75 units but who are within the
domestic consumption category will pay Sh350 for a unit, Sh77 more than the
previous rate.
According to Mr Ngamlagosi, the new rates for all categories of
electricity consumers will last for three years. This means that Tanzania
Electric Supply Company (Tanesco) will only be allowed to ask for another
tariff increase after December 31, 2016. In line with the new tariffs, power users
in the T-1 category, who used to pay Sh221 for every unit of electricity they
consume, will now pay Sh306 per unit (38.46 per cent or Sh85 more. The T-1
segment is applicable to groups of customers who use power for general
purposes, including residential, small commercial and light industrial use,
public lighting and billboards. This is the group to which the majority of
electricity consumers in the country belong.
Similarly, consumers who fall under T-2 will, starting next month, pay
Sh205 for every unit of electricity they consume, up from Sh132.
T-2 is applicable for general use where power is metered at 400V and
average consumption is more than 7,500kWh per meter reading period and demand
doesn’t exceed 500KVA per meter reading period.
According to the rates approved by Ewura yesterday, consumers in the T-3
category will from next month be paying Sh45 more to buy a single unit of
electricity. Their new rate will be Sh163. Before the new rates, they were
paying Sh118 for a unit. T-3 refers to consumers within the general use
category where power is metered at a high voltage line of 11KV and above.
In the same vein, those categorized under T-3 HV will have to pay Sh159
instead of Sh106 per unit (an increase of Sh53).
“This order shall come into force on January 1, 2014…The approved
tariffs imply an average increase of Sh39.19 per cent compared to the current
tariffs,” reads part of the Ewura statement.
“The approved tariffs and charges shall remain in force until
December 31, 2016 unless results of cost of services study that will be
undertaken in 2015 will recommend new tariffs,” the statement further says.
Ewura further said that the new rates were determined by the new formula
for fixing power tariffs which was adopted from the 2012 cost of service study
performed by an independent consultant, AF-MERCADOS which takes into account
sustainability of electricity services in the country.
The new tariffs fixed by the regulator are in response to applications
filled by the Tanzania Electric Supply Company (Tanesco), in October this year
requesting Ewura to hike power tariff at 67.87 per cent effective from October
2013, 12.27 per cent effective from January 2014 and another increase of 9.17
per cent effective from January 2015.
Moreover, Ewura director of electricity business, Mr Anastas Mbawala,
said that in imposing such power rates, the regulator had also imposed 10 terms
of reference for Tanesco, one being the power utility parastatal to submit to
the authority a monthly report on actual generation and planned generation of
electricity and second to ensure that the projects are implemented in line with
the Power System Master Plan.
Other terms of reference include; submission of quarterly reports on the
supply and reliability of data of 11kv, 33kv, 132kv and 220kv by region for
verification including total number of customer interruptions and total
customers served, submission of demand side management, revenue management,
reducing technical and non-technical revenue losses, fighting illegal
connections and electricity theft and submission of report of installation of
LUKU metres and Automatic Meter Readers.
Other terms are submission of quarterly reports on collection of revenue
from debtors, enhanced customers education of their rights, submission of
application of tariff adjustments in line with changes in fuel cost, inflation
and currency fluctuations, providing the regulator with information on business
performance and submission of implementation plan of this order before 31st
March 2014.
Commenting on the hiked power tariffs, the president of the Tanzania
Chamber of Commerce, Industry and Agriculture (TCCIA), Mr Peter Chisawilo, said
that members of the business community were set to meet to discuss the matter
so that they decide on how to move forward.
Mr Chisawilo said that it was imperative for members of the business
community to know the impact of the hiked power tariffs on the competitive
strength of commodities produced in the country in the East African market.
“We will definitely meet to discuss the implications of the new power
tariffs on the business performance in our country in relation to our
counterparts under the East African Community,” he said.
