Mera denies Escom 60% tariff hike instead approve 31 % effective Oct 1

Malawi Energy Regulatory Authority (MERA) has denied the Electricity Supply Commission of Malawi (ESCOM) proposed 60 percent tariff hike and instead approved only 31.8 percent to be spread across the next four years.

Mera chairperson Bishop Bvumbwe and CEO Magalasi: Regulator meets Escom halfway on tarriff hike

MERA Board Chairperson Reverend Dr. Joseph Bvumbwe said during a news conference on Monday in Lilongwe that the adjustment will be spread over a four-year period.

The regulator has made the decision to protect the consumers following public enquiries it conducted to seek stakeholder input and expect the power utility to work on meeting set targets as outlines in its base tariff application.

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 first year of the application in 2018, the hike is at 20 percent, second year 7 percent, third year 3 percent and final year 10 percent increase,” said Bishop Bvumbwe.

This means that effective October 1, consumers are now paying an average 20 percent more per kilowatt hour for 2018/19.

Bvumbwe further said with this effect, they expect ESCOM to deliver quality services or risk penalties such as revoking its business license.

The regulator has also adjusted downwards ESCOM’s annual revenue by K206 billion from the proposed K1.2 trillion.

In his remarks, Mera chief executive officer Collins Magalasi said they had approved the revenue increase to Escom on the promised that it would provide the power that consumers are paying extra for annually.

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mandala
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mandala

Kuba too much ku ESCOM koma apa mukuwonjezela mitengo

#DzukaniAmalawi
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#DzukaniAmalawi

Whether the increase is justifiable or not, the fact of the matter is that the consumers will be hit where it hurts the most. The increase will substantially reduce disposable income further reducing economic activity resulting in lower GDP. If inflation is in single digits and yet electricity is going up at 20% in the first year; then we have a biiig problem. People will be much worse off than they were last year. This will be made worse with the increase of fuel which will then push up the price of ordinary goods and services. Tighten your belts my… Read more »

President Mkango Lion Manthakanjenjemereza
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President Mkango Lion Manthakanjenjemereza

let us blame colonialism

Count Dookoo
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Count Dookoo

What people don’t understand is that this hike is not enough. EGENCO still selling atrates that are below proper production cost. The fact that its a reverend that approves business decicions on pricing is a problem.. Sadly Malawians don’t learn. They pay too little for electricity and then wonder why that electricity service is poor. If you pay peanuts then prepare to get monkeys.

Tadala
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Tadala

Production costs in Malawi parastatals are always high due to failure to properly account for overheads and control waste. This cannot be passed on to the consumers. We new the creation of EGENCO is another channel of wastage that if not properly handled will kill the Malawi economy. It is sad that those who heading EGENCO are busy preparing monkeys for the consumers to get.

Count Dookoo
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Count Dookoo

We pay some of the lowest rates on power in the world at K60/kwh. Cost of power has lagged behind inflation. But ESCOMSs costs haven’t. Removing government inefficiency helps but does not solve this problem. And remember we not only need to pay the cost of power production but also the cost of building new stations. And the new power coming from Moz and Zambia costs more than our rates. There’s no escaping this. We have not earned the ability to have some of the cheapest power costs in the world.

br1zzy
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br1zzy

Mr Dookoo, with all due respect Malawians are one of the lowest paid in the region. You can not expect a teacher whose getting k50,000 to be paying k300/kwh for electricity, that will be way over their reach. If you really look at it, Malawians are paying for the electricity prices to be subsidized. The country uses a command economy system where government controls prices of most commodities so that everyone can afford them. However, that has some negative impacts like people paying high taxes so that government can afford to regulate the prices. So if you look at it… Read more »

Make Malawi Great
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Make Malawi Great

We pay for blackout, state capture funding dpp, we also pay for corrupt gensets procument!! So tell me more about production cost! We basically paying escoms inefficiencies! I dont know which world u living in where u pay high prices for sub-standard services.

salsa
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salsa

and yet my salary increment was only 5%, like that isn’t bad enough… ziliko ku malawi, we face hikes of everything atleast twice every year, koma salary ili pompo.. kaya…

Benzo
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Benzo

Mathematically, MERA has approved 1.2×1.07×1.03×1.1 which is equal to 1.454772. Effectively, the approval is of 45.5%. I don’t know where 31.8% is coming from. This country is really on fire.

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