Electricity Blunder

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Windhoek Ordered to Stop Overcharging By Petronella Sibeene WINDHOEK The Minister of Mines and Energy, Erkki Nghimtina, has ordered the City of Windhoek to stop overcharging its customers and to stick to the electricity tariffs that have been approved by the regulatory body, the Electricity Control Board (ECB). This comes after the ECB received complaints from several concerned parties alleging the municipality collects millions of dollars from its customers by using a non-approved tariff schedule. Because of that, an urgent meeting was convened by the Ministry of Mines and Energy to find a solution to the impasse between the City of Windhoek and the ECB over these allegations. Based on the recommendations that came out of the meeting which was attended by the Ministry of Mines and Energy, the City of Windhoek, the Electricity Control Board and the Attorney General, the minister yesterday issued a statement ordering the City of Windhoek to start using the ECB levy charge of 0.45 cents per unit and not 0.5 cents per unit for electricity. “The increased ECB levy charge (from 0.45c/unit to 0.5c/unit) should not be charged and should be rectified,” the minister said. The minister further ordered that the ECB levy that has accrued to the city and interest thereon should be put into a fund, which would be used to offset against future ECB levies to the benefit of the City of Windhoek’s customers. Nghimtina, who expressed satisfaction with the outcome of the discussions between the two parties, said additional consultative meetings would be held between technical counterparts of the ECB and the city on financial matters in order to amend the current unapproved tariffs used with a view to correcting “the damage done”. These meetings will also serve as a platform to iron out all discrepancies. “Insofar as the former is higher than the increase approved by the ECB Board, such amount will be offset against future tariff increases to formal approval and endorsement thereof,” Nghimtina added. The minister advised the City of Windhoek to approach its council with the revised schedule of tariffs for formal approval and endorsement. Apart from the unapproved 0.5 cents per unit used by the City of Windhoek, a tariff increase of 10.2 percent, which the ECB approved upon the city’s application was not implemented. Instead, the council approved a tariff of 14.7 percent, which represents a tariff increase of 11.9 percent. The City of Windhoek has denied overcharging customers and said instead of introducing a 10.2 percent tariff as approved by the regulator, it increased its tariff by 8 percent, within which it made provision for 1cent/ 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. The Chief Executive Officer of the ECB, Siseho Simasiku, 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 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. Nghimtina yesterday clarified that the purpose of the Electricity Bill was to regulate the entire electricity supply industry and at no point was there an intention to exclude local authorities from the application of the Act. He remarked that in as much as the current Electricity Act is not abundantly clear that it applies to the electricity supply industry, the new Electricity Bill 2006 to be tabled in the National Assembly soon will address all that is confusing at this stage. Contacted for comment on the matter, City of Windhoek Spokesperson Elizabeth Sibindi said, “We still have to discuss the outcome internally and will come up with a response soon.”