Consumers Association of Malawi (Cama) has written Malawi Energy Regulatory Authority (Mera) demanding a reduction of electricity tariffs following the exit of Aggreko in the power market.
Aggreko, which had a four-year contract with Electricity Supply Corporation of Malawi (Escom), was supplying Escom with 78 megawatts (MW) to the national grid through its diesel-powered generators.
Under the contract, Escom was paying Aggreko around K1 billion in a month, which was passed on to consumers through a three percent tariff on top of what consumers already paid.
In the letter, Cama executive director John Kapito, has argued that it is economically painful for consumers to keep paying for a service that is no longer available.
Reads the letter in part: “Consumers were paying about three percent towards Aggreko’s power generation and now that the contract has been terminated, we expect Mera to immediately reduce the electricity tariff and not subject consumers to a service they are not being provided.”
Kapito has since appealed to Mera to be transparent and accountable to consumers.
He said: “We would like to see Mera being proactive such that when and where there are any changes in supply and price, upwards or downwards Mera should be able to pass on the changes to consumers immediately.”
Under the 2018-2022 Escom Base Tariff Schedule, Mera in October 2018 approved a 31.8 percent base tariff for the four-year period with effect from October 1 2018.
Implementation of this base tariff was segmented into four annual tranches.
Given this structure, if the electricity tariff is reduced by three percent, the price of electricity would go down from the current K104.46 per Kwh to K101.33/kWh.
In her response to the query on Wednesday, Mera senior public relations officer Fitina Khonje said the energy regulator is already looking into the matter and will communicate the outcome.
She said: “We are conducting an assessment and once finalised we will announce how this will be handled.”
The government contracted Aggreko in 2017 to complement power generation at a time water levels in Lake Malawi had gone down, a development which saw hydropower generating machines working at 60 to 70 percent of their capacity.
Currently, access to electricity in Malawi is at about 10 percent of the population.
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