Escom seeks Mera consideration on higher tariff increase

Electricity Supply Corporation of Malawi (Escom) has said it plans to renegotiate  with Malawi Energy Regulatory Authority (Mera) for its proposed  60 percent power tariff increase application which was reduced  by the regulator  to 31.8 percent spread over four years with 20 percent effective October 1 2018.

Escom management addressing a news conference 
Bvumbwe and Magalasi announcing Mera position but Escom wants consideration to increase further

Escom chief executive officer Allexon Chiwaya told a news conference in Blantyre on Tuesday the approved 31.8 percent that Mera approved would not enable the power utility to address the challenges it is facing.

Chiwaya said the cost of buying electricity remains high and said to attain the ambitions of  improving  service delivery, the power utility need to “have more money and the money would only come from the tariffs.”

He said: “As part of the review by Mera, sums included in the previous base tariff [2014- 18] were deducted. A sum of K11 billion was provided for in the 2014-2018 for this project [Malawi-Mozambique interconnector] and this is the amount that was to have been deducted, leaving K46 billion in the 2018-2022 base tariff. However, [Mera] deducted a further K20 billion leaving K26 billion in the approved projects for the 2014-2018 base tariff.”

Escom also proposed to upgrade the Nanjoka Substation which is to support the Lilongwe Water Project and Salima Cotton Factory as well as the Eastern Transmission Backbone which is to support the enhancement of supply to the Northern Region were dropped.

The projects were estimated at a K4.1 billion cost. However, Mera turned down the proposal.

The 132 Kv Eastern Backbone transmission line from Nkhoma via Salima to Chintheche substations was also included in the base tariff submission to Mera at an estimated cost of K43.1 billion.

The project involved the replacement of obsolete wooden poles with steel poles to avoid power interruption in the Northern Region which came about due to regular maintenance.

Escom boss they said will re-engage Mera on the matter.

Mera’s decision to trim tariff hike to 31.8 percent followed nationwide public consultations on the application by Escom for the 60 percent increase from an average K73 per kilowatt hour (kWh) to K117 per kWh within a period of four years.

But in his remarks at the news conference, Escom commercial and customer services manager, Wiseman Kabwazi, said with the new tariffs, it would remain relatively expensive to produce electricity.

“Our current position is to go back to era and seek consideration,” said Kabwazi.

He said the current approved increase will assist Escom “in moving towards a cost effective tariff “but that it would not be “as cost effective.”

Mera announced it approved an average increase from the current K73.23 to K88.02 for 2018/19, to K94.54 in 2019/20, to K91.98 in 2020/21 and finally K101 in 2021/22.

Consumers are now paying an average 20 percent more per kilowatt hour for 2018/19.

Mera board chairperson Bishop Joseph Bvumbwe said the 31.8 percent increase would translate to an average tariff of K95.15/kWh against K117.64/kWh which Escom requested.

The regulator said moved to protect the consumer by approving the annual increase based on the extra kilowatt per hour that Escom offers its customers.

Mera chief executive officer Collins Magalasi said the regulator approved the revenue increase to Escom on the promise that it would provide the power that consumers are paying extra for annually.

Escom also told reporters a new tarrif plan dubbed  ‘lifeline tarrif; that stipiulates that n customers buy the first 50 electricity units at a base rate of K47. 50 per unit and any additional unit after 50 mark  will see the domestic consumer buy a K63.76 representing a 30 percent increase.

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James zimbiri
James zimbiri
2 years ago

Koma magetsiwo azasiya kuthima kawirikawiri?

mtete
mtete
2 years ago

69% ESCOM requested meant 60% more VAT into Goodal’s coffers to finance DPP’s campaign. Some if the projects highlighted have already featured in previous applications meaning they have already been paid for through current tariffs.

Masauko Mbewe
Masauko Mbewe
2 years ago

Anthu oyipa, akuba inu, tikudziwa amene wakutumani kukonda kukama yowonda ng`ombe. Inuyo mumapatsana ma units aulere monthly but you want to punish us heavily while your services are at the lowest point. Mupitira limodzi ndi ambuyani chaka chamawa.

maseko
maseko
2 years ago

Just to add. ESCOM is a public entity created to provide services to the citizens. It’s run on tax papers’ money. It is not a private company that should splash out benefits as if they have all the money in the world to spend. Make cuts in your operations and you will see that the revenue you have been getting is more than enough to provide fairly priced services to the nation and not what you are asking for. Working for the public service is a sacrifice. For once, be human beings

mizwanya
mizwanya
2 years ago

ESCOM dont take malawians as fools,tatopa nanu ndani amakumba ndalama,,magetsi is a necessity but the way u doning things hw many people wl b managing to hv lights?magetsi akuwawa kale pano kungoinikira why r u so heartless to the poor masses with ur president,,mwabazo zakwana bring change we wnt to c change inu pa chaka magetsi mumakweza kangati and always giving us pathetic services,,u so sick escom u so sick

#DzukaniAmalawi
#DzukaniAmalawi
2 years ago

Even if the request for tariff increase is warranted, the fact that the board and executive are unable to arrest rampant corruption within and outside their ranks, is problematic. Consumers have lost confidence in Escom’s ability to generate and distribute electricity in the most efficient and cost-effective way. It seems the request for higher tariffs is to compensate for massive cash leakages with a board that doesn’t have a spine to close the gapping hole.

Mlakaviwa
Mlakaviwa
2 years ago

Fuck off ESCOM. Tell me who went away with 3million litres of diesel. Your management still drive expensive cars in our roads.

Sibuno
Sibuno
2 years ago

Put in place sound financial management systems and stop funding political parties. Not all Malawians are associated with parties, nor parties are supposed to benefit from Escom business. Escom’s business is to provide power to Malawi. Send back the generators which has been a waste of resources. You acquired them when you were not ready to manage them

Nadzimbiri
Nadzimbiri
2 years ago

Escom… Konzani kaye kampani yanu, timamva kuti ndalama zanu simukuziyendetsa bwino. work on this first osathamangira kuwakwezera aMalawi ma tarrifs, we are already pressed financially as Malawians. Tsekani ziboozo kaye ndalama mulinazo koma zingopitilira

Awize
Awize
2 years ago
Reply to  Nadzimbiri

They want more money to fund the ruling elites at the expense of poor Malawians. There is massive abuse of public resources at ESCOM. They are not honest. Bravo MERA for partial approval of the new tarriffs

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