Escom to raise tariff by 37%

The Malawi Energy Regulatory Authority (Mera) has given Escom the go-ahead to raise its tariff by 37.2 percent, a reduction from the initially proposed 58 percent which Consumers Association of Malawi (Cama) has said is acceptable.

In an interview in reaction to the tariff hike, Cama executive director John Kapito said the approved tariff hike is in line with Cama’s proposal during consultation meetings to implement the raise in phases.

In September last year, the Electricity Supply Corporation of Malawi (Escom)  submitted a 58 percent base tariff hike proposal from its initial 31 percent which received criticism from various stakeholders who argued that the tariff was on the higher side.

Mera, in a statement released at the weekend and signed by its board chairperson Lyton Dzinyemba, said the regulator will periodically monitor and evaluate Escom’s key performance indicators (KPIs) to ensure a healthy financial status and deliver quality service to consumers.

Reads the Mera statement in part: “The specific key targets are aimed at making improvements in the service delivery, revenue management, staff productivity, service quality and customer service.”

Mera said the increase shall be phased and spread over four years, starting with a first increase of 13.5 percent with effect from April 4 this year. The average electricity tariff has changed from the current K31.54 per kilowatt (kwh) to K43.24 (kwh).

During consultation meetings with electricity consumers, Cama, the Malawi Confederation of Chambers of Commerce and Industry (MCCCI) and others rejected the proposed 58 percent hike, arguing the amount was unreasonable.

At that time, Kapito accused Escom of transferring its inefficiencies to consumers by raising tariffs. He dismissed Mera’s suggestions that the hike was necessary to allow Escom to improve power generation, distribution and supply.

However, yesterday, Kapito said the 37.2 percent electricity tariff hike was acceptable in line with what his association presented, requesting that the increase must be phased over time than just a one-off hike.

He said: “This increase is acceptable by all standards. Consumers are to understand the key performance indicators so that we are able to hold Escom accountable throughout the process,” said Kapito.

He said the spreading of the increase in four-year phase timeline will assist consumers to plan on their usage of electricity.