Overcharging for Electricity

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Ministry Plans Urgent Meeting By Wezi Tjaronda WINDHOEK The Ministry of Mines and Energy will convene an urgent meeting to find a solution to the impasse between the City of Windhoek and the electricity regulator, the Electricity Control Board, over charges that the former is overcharging its residents for electricity. “It must be an urgent meeting in respect of consumers that are being kept in the dark. We need to clear the situation very fast,” said ECB Chief Executive Officer, Siseho Simasiku, yesterday. Simasiku said the Attorney General’s office recommended that the Ministry of Mines and Energy, the ECB and the Ministry of Regional and Local Government, Housing and Rural Development, meet as a matter of urgency with councillors of the Windhoek City Council to resolve the matter. A ministry official yesterday confirmed this and added that it would known by Monday next week as to when the concerned parties would meet to discus the matter. “The ECB wishes to settle the matter in a responsible way, ensuring that the interest of the parties involved are protected, that the laws of the country are complied with and that the efficient supply of electricity in the City of Windhoek continues against payment of the ECB approved tariff,” said Simasiku. Although the matter may go to the courts if no solution is found, Simasiku said the Attorney General, from whom the ECB sought advice on the issue, advised that the two exhaust all avenues before any court intervention. The ECB maintains that the city council is charging electricity tariffs that are not approved by the regulator. Instead, of implementing a tariff increase of 10.2 percent, which the ECB approved upon the City’s application, the council approved a tariff of 14.7 percent, which represents a tariff increase of 11.9 percent. The City of Windhoek denied overcharging and said instead of introducing 10.2 percent as approved by the regulator, it increased its tariff by 8 percent, within which it made provision for 1cent per kWh to cater for the cost to ring-fence the city’s electricity department. But, according to the ECB, the 1 cent/kWh was meant for equity contributions for the planned Central RED, which was rejected by the regulator because the consumers could not be made to foot the bill for this. He wondered why Windhoek wanted its residents to pay for the cost of establishing REDS, while other municipalities, which are much poorer than the City of Windhoek, have found other means of raising the equity. “The Southern RED which is about to be established has created measures to raise equity, why should the City of Windhoek, which is richer, not do this?” he asked. The ECB also took issue with the fact that the council would use the N$6 million for ring- fencing while the ring-fencing exercise was already done with the regulator’s assistance. “The ECB sees no basis why this exorbitant amount for ring-fencing should continue to be imposed on City of Windhoek electricity consumers,” said the CEO. Simasiku warned local authorities against taking the law into their own hands, adding: “The ECB believes that local authorities run serious risks if they operate outside the electricity and local authorities legislation.” The ECB was established in 2000 to regulate the generation, transmission, supply, import and export of electricity in the country, but the City’s statement in which it denied that it was overcharging its clients said that under the current legislation, the ECB is not the electricity regulator of local authorities in respect of tariffs yet. Yet Simasiku maintained that the Electricity Act also applies to local governments, which are governed by the Local Authorities Act, under which the provision of electricity to local authorities is subject to the Electricity Act. “If parliament had any intention when it made this law to exempt local authorities from application thereof, it would have stated so clearly. Ultimately, if there is any doubt … (which is not the case) it is the function of the court to decide on the correct interpretation of the law and not … the ECB or anyone else,” said he. According to Section 25 of the Electricity Act 2000, a licensee is not allowed to levy any charge against clients other than the tariffs specified in the schedule of approved tariffs. The City of Windhoek has renewed its license, which it was granted in 2001. ECB said the council has been collecting about N$3 million from its clients since July 2006.