Mera, Escom should spare us roadshows

They are at it again. The Malawi Energy Regulatory Authority (Mera) and the Electricity Supply Corporation of Malawi (Escom) have embarked on an exercise to seek input from stakeholders, including electricity users, on Escom’s proposed tariff hike.

Escom has apparently applied for an average increase of K18.34 per unit of electricity to be implemented between January 2014 and December 2017. If approved, the 58 percent proposed tariff hike will move the cost of electricity from K31.54 to K49.88 per unit.

In a semblance of transparency, Mera, the energy sector regulator, has lined up a schedule for processing the tariff hike application. The programme includes public hearings in the Southern, Central and Northern regions.

For those who for one reason or another cannot make it to the venues, Mera is inviting submission of written comments before the hearings.

This sounds an inclusive exercise on the surface. But, for all I know, in Malawi many of such hearings or initiatives have rarely borne benefits in favour of the consumers. It has always been the capitalists having an upper hand.

In other words, such sessions, so-called public hearings or consultations, have been more of talk shops where consumers, both commercial and domestic, present their beautiful cases against the hike but, at the end of the day, little or nothing is taken on board.

Early last month, after Nation on Sunday reported of this impending electricity tariff hike, Escom came with its guns blazing, dismissing the story as baseless, unfounded and malicious. But now consumers are the better judges on who was malicious.

This is not the first time Escom is planning to raise tariffs. In fact, since May 2012 when government, through Mera, introduced the automatic pricing mechanism (APM) for fuel and automatic tariff adjustment formula (Ataf) for electricity, Escom has increased the cost of electricity by close to 84 tambala in every K1 or 84 percent.

The idea behind Ataf is that consumers should pay for the full cost (or something closer to that) of the services they use. This, in principle, makes sense. But consumers can hardly appreciate such principles when half the time they live without power, yet at the end of every month, they get ever-rising electricity bills for such a poor service.

In fact, in 2009 Malawi had 63 days of power outages in a year (365 days), accounting for the worst reliability record of the 24 sub-Saharan Africa countries sampled, according to a report by the Millennium Challenge Account Malawi Office. This lack of reliable power source deters investments in the manufacturing and mining sectors besides lowering social returns.

We have always been told that Escom “undercharges” the cost of the unit of electricity it supplies to consumers and that Malawi has some of “the lowest electricity tariffs in the region”. But, it is also a fact that having moved the tariffs closer to the preferable or market rates, Escom has not improved its service delivery to consumers. The country is still moving “towards power all day, every day” as the Escom brand promise purports. As things stand, we will only have power all day every day at infinity.

I am inclined to believe that Escom is pushing its inefficiencies, that include political interference, leading to loss of revenue to consumers through tariff hikes.

These high tariffs are here to stay as economists say that prices are sticky going downwards. But suffice to say that consumers need a stronger Mera to protect them from the predatory Escom which seems to be too big to be controlled by its regulator.

Electricity consumers deserve better than to be taken on board through the so-called “public hearings” to “rubber stamp” what authorities have already approved in principle.

I see Escom abusing its monopoly status as the sole producer, distributor and seller of electricity in the country to skin alive consumers who, save for a few with solar energy sources, have no alternative.

Please, the Competition and Fair Trading Commission (CFTC), come to the rescue of electricity consumers as you did in taming the monopolistic traits of Blantyre Water Board (BWB) and the Independent Private Schools Association of Malawi (Isama) recently.