There were mixed reactions at the second 2023—2027 Electricity base tariff application hearing in Lilongwe as some participants were of the view that there’s need for an adjustment of the tariffs while some quarters feel now is not the right time for the same.
The public hearing was hosted by the Malawi Regulatory Authority (MERA) to source views from customers on the application by the Electricity Supply Corporation of Malawi (ESCOM) to have a 67.9% adjustment of electricity tariffs for the next four years.
The adjustment is in line with the 2017 Tariff methodology that require power sector licensees to prepare and submit business plans to MERA for consideration and approval.
Supporting the application, Economics Association of Malawi (ECAMA) Chief Executive Officer Andrew Kumbatira said there should however be a monitoring mechanism on how the tariffs are helping Escom to be effective and successful.
Kumbatira said there is need to support to Escom in order for the organisation to fully provide a good service to the nation.
“As ECAMA we support their application. We need electricity to grow the economy. Studies have shown that where there is power energy there is economic growth, therefore the application looks to improve service delivery and growth of the energy sector which will in turn boost the economy”, said Kumbatira.
But opposing the move, Human Rights Defenders Coalition (HRDC) Chairperson Gift Trapence said their organisation cannot support the application as at now based on Escom’s functional review has shown that the organisation is in deep maladministration.
Trapence among other things pointed out that Escom’s expenditure must be reviewed amd should as well work on the reviews they got from the recent functional review.
“I think it wouldn’t be fair to have these tariffs raised as this is an organisation that is overspending on several areas. This is an organisation that hasn’t been audited for three years. As HRDC we will never allow these tariffs to be raised and we will do anything to make sure that doesn’t go through”, he said.
Similar objections came from the Malawi Confederation of Chambers of Commerce and Industry (MCCCI)’ Chief Executive Officer Chancellor Kaferapanjira who bemoaned ESCOM to first people’s trust before making an application for tariff adjustments.
In response, MERA Chief Executive Officer Henry Kachaje said by law there is a requirement for the regulator to give a platform for consultations therefore the views that were presented will be taken into consideration.
Kachaje stressed that Malawians should understand that the tariff adjustment will be spread across the four years and not once off.
“The input from participants is really viable and it just shows how the public is keenly following things happening in the energy sector. Going forward we will set key performance indicators and we will arrange an annual deliberate move to evaluate them, this will be made public so that whatever we do should really benefit the general public. But what we should understand better is that this 67.9% will be spread withing 2023 to 2027 if approved”, Kachaje said.
According to ESCOM, the tariff adjustment will among other things focus on customer and stakeholders, provision of continuous and uninterrupted electricity supply, affordability and improved customer service.
