Regulatory body puts power tariff increase on hold

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By Tumisang Serame

Lesotho Electricity and Water Authority (LEWA) has granted electricity consumers a temporal reprieve from the ever-increasing tariffs when it suspended a request for increment in tariffs by the country’s utility company.

The regulator put the Lesotho Electricity Company (LEC)’s application for tariff increase on hold due to the coronavirus pandemic (COVID-19) that has propelled the world to enforce lockdowns restricting movement of persons and closure of non-essential businesses and services.

The electricity company on January 17 had applied for an electricity tariff increase by 32.6% across all customer categories while also requesting an approval of a revenue requirement on M1.21 billion for the financial year 2020/21.

According to the company’s application to the regulator, it cited the increase is owing to the the bulk electricity purchases costs (mostly imports), operating expenditure costs, return on assets and depreciation costs.

The proposed increases if approved by the regulatory body were to be effective from May 1 2020.

“The Board of Directors of LEWA took note of the prevailing dire situation brought about by the COVID-19 pandemic and its attendant negative consequences, particularly the economic meltdown, as well as the subsequent Government Policy Statements”, the regulator said in statement.

The regulator further said it may be difficult to announce and implement any tariff increase for electricity users amid emphasising “LEC must be enabled to conduct its business without hindrance”.

The regulator decided that “the existing LEC tariffs remain in force for a period of three months from 1 May 2020 to 31 July 2020, to defer the tariff determination decision on LEC ‘s application for at least 3 months from May 1 and that LEC recoup its outstanding debt from both the government and private sector” concluded the regulator.

The electricity company is owed millions of Maloti by both government departments, ministries and parastatals and by its commercia and industrial clients.

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