The Electricity Control Board (ECB) yesterday announced that it has approved a 16.71 percent tariff increase from N$1.28 to N$1.49 per kWh. During a media briefing in the capital, ECB’s chief executive officer, Foibe Namene, noted that approximately 8 percent of the approved increase is due to the depreciation of the Namibia Dollar against the US Dollar.
“This increase would suffice for NamPower to cover its allowed operating costs, keep the lights on and fulfil its financial obligations. The approved tariff adjustment is effective from July 01, 2016,” said Namene.
She added that the approved increase is intended to ensure that NamPower can sustainably provide for the future electricity needs of the nation. The increase is applicable to NamPower’s bulk customers, such as regional electricity distributors, local authorities, regional councils and mines. Respective bulk customers (distributors) will now individually apply to the ECB for tariff increases that will be applicable to end consumers. NamPower initially requested an effective bulk tariff increase of over 31 percent which would have resulted in an increase to N$1.68 per kWh (inclusive of generation and transmission) for the financial period 2016/17, to meet its service delivery costs and for the tariff to remain cost reflective.
Some of the reasons provided by NamPower for the request included the unexpected depreciation of the Namibia Dollar against the US Dollar, as well as provision for its year-on-year revenue requirement, only taking into account actual costs and losses.
According to Namene, the ECB took into account numerous factors when considering the application, including N$50 million made available by the Ministry of Mines and Energy, through the National Energy Fund.
This amount is meant to relieve consumers from high tariff increases thus contributing to the overall reduction of anticipated increases. “The amount will be allocated to NamPower to cover part of the energy cost denominated in US Dollar currency to cushion the impact of the currency fluctuation to end users,” Namene explained.
She added that Namibia continues to import a large share of electricity, at times importing up to 70 percent of electricity requirements, from the Southern African Development Community region. Namibia’s importation of electricity depends on the availability of water at the Ruacana power station.