Expect Tariff Increases, Consumers Told

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By Petronella Sibeene WINDHOEK Namibians must brace for substantial electricity tariff increases in the next five years, warned Electricity Control Board (ECB) Chief Executive Officer Siseho Simasiku. Yesterday, Simasiku announced the ECB’s approval of NamPower’s annual increase of 10.2 percent, to come into effect on 1 July 2006. “NamPower made an application to the ECB on April 11, in terms of Section 25 of the Electricity Act (Act 2 of 2000) for annual increases in its tariffs to transmission-supply customers. NamPower requested an overall average tariff increase of 12.58% in its tariffs,” Simasiku revealed. The increase has been prompted by several factors. Currently, South Africa, which supplies the country with electricity via Eskom has in the past months experienced technical problems in its electricity transmission system, including the Koeberg nuclear station in the Western Cape. The situation is only likely to get back to normal by the end of July 2006. Due to that, NamPower has been running the Van Eck coal-fired power station in Windhoek and the Paratus diesel-fired power station at Walvis Bay at great costs to meet the power demand in the country. Also, the tariffs at which NamPower purchases electricity from Eskom have increased. Simasiku reported that the new bilateral contract between Eskom and Nam Power is not as favourable as the previous contract which expired in December 2005. “There are a number of reasons why the ECB had no choice but to increase the NamPower tariffs substantially,” Simasiku said during a press briefing yesterday. Last year, Cabinet took a decision that the NamPower tariffs need to reach cost recovery within the next five years. He said that in the future Namibia might experience a 10 per cent yearly increase given the scarcity of power in the country and the region at large. Power is becoming scarce and people should be careful to use electricity sparingly, he warned. Although the ECB has not yet received any applications for tariff increases from the regional electricity distributors (REDs), Simasiku was positive that his office is likely to receive these by mid-June, 2006. However, there was no guarantee that the ECB would approve all the applications from REDs, he said, adding that the review will be based on the revenue requirements of a particular RED. “It will depend on the motivation. We expect the applications before or by June 15, 2006,” he said. As Southern Africa experiences at least a six percent electricity increase in demand on an annual basis, Simasiku indicated that the ECB is currently busy with a demand side management study. This study has already identified options that would reduce demand significantly, quickly and cost-effectively. Replacing incandescent lights with compact fluorescent lights that consume approximately six times less electricity while giving the same light output, solar water heaters, ripple control, tariff design, consumer awareness and energy audits are some of the options that could be applied in an effort to tackle the electricity deficit in the country. These measures, according to the Chief Executive Officer, would be implemented during the second half of 2006. The power shortage in the region has meant that NamPower purchases power at higher rates and thus it is important that Namibia attracts investors in power generation to enable the country to become self-reliant in meeting the local power demand. Unfortunately the current prices which are in addition not cost-effective put the country at a disadvantage in attracting foreign investors, he added. Simasiku appealed to all Namibians to switch off electrical appliances that consume a lot of power such as geysers especially during the peak hours of 17h00 to 20h00. During peak hours people are advised not to cook or alternatively to use other forms of energy such as wood. “Use wood. Some people think using wood takes one back to the olden days,” he said.

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