LEC wants ants 25,4% power tar­rif hike

Lesotho Times - - Front Page - Bereng Mpaki

CON­SUMERS should brace them­selves for an in­crease in elec­tric­ity charges fol­low­ing the Le­sotho Elec­tric­ity Com­pany’s (LEC) pro­posal for a 25.4 per­cent tar­iff hike for the 2016/17 fi­nan­cial year.

LEC’S reg­u­la­tor, Le­sotho Elec­tric­ity and Wa­ter Au­thor­ity (LEWA), made the an­nounce­ment this week while also invit­ing stake­hold­ers to a pub­lic hear­ing on the pro­posed in­crease, sched­uled for 8 April 2016 at Vic­to­ria Ho­tel in Maseru.

Dur­ing the same hear­ing, LEWA will also so­licit views from the pub­lic over the Wa­ter and Sew­er­age Com­pany’s (WASCO) pro­posal to in­crease ur­ban wa­ter and sew­er­age ser­vice tar­iffs by 13 per­cent.

Among the rea­sons LEC cites for the pro­posed in­crease are the in­creas­ing costs of im­port­ing elec­tric­ity and higher op­er­at­ing ex­pen­di­tures.

“LEC is re­quest­ing an ap­proval for a rev- enue re­quire­ment of M819.5 mil­lion for the fi­nan­cial year 2016/17. The com­pany is re­quest­ing a tar­iff in­crease of 25.4 per­cent on both en­ergy and Max­i­mum De­mand (MD) charges,” reads part of LEWA’S state­ment dated 1 March 2016.

“Amongst the var­i­ous driv­ers for the ap­pli­ca­tion that LEC has men­tioned are elec­tric­ity bulk pur­chases and op­er­at­ing ex­pen­di­ture for trans­mis­sion and dis­tri­bu­tion busi­nesses.

“As an ex­am­ple, LEC states that elec­tric­ity bulk pur­chases from South African power util­ity Eskom were ex­pected to in­crease by eight per­cent in the com­ing years.

“In ad­di­tion, the com­pany main­tains that op­er­at­ing ex­penses have in­creased as a re­sult of growth in the de­mand for elec­tric­ity, and the need for re­place­ment of age­ing net­work as­sets, en­hanced re­li­a­bil­ity and com­pli­ance to per­for­mance stan­dards.”

Dur­ing the 2015/16 fi­nan­cial year, LEC re­quested an 18.32 per­cent in­crease for all its dif­fer­ent cus­tomer cat­e­gories. How­ever, LEWA only al­lowed the charges to be in­creased by a max­i­mum of seven per­cent.

LEWA Chief Ex­ec­u­tive Of­fi­cer Ntoi Ra­papa ( pic­tured) told the Le­sotho Times yes­ter­day that while LEC had been de­liv­er­ing re­li­able power sup­ply in pre­ced­ing years, it was dogged by op­er­a­tional chal­lenges.

“In re­cent years, there have been few power cuts from LEC which is a pos­i­tive de­vel­op­ment in their ser­vice de­liv­ery,” Mr Ra­papa said.

“How­ever, they face a lot of chal­lenges such as slow rates of new elec­tric­ity con­nec­tions and high op­er­at­ing costs. Im­port­ing elec­tric­ity from out­side the coun­try puts LEC in a dif­fi­cult sit­u­a­tion as their prices are sub­ject to ex­ter­nal ad­just­ments in coun­tries where they source the power.”

Mr Ra­papa said in re­cent years, LEWA had ap­proved tar­iff hikes at lower rates than those pro­posed by LEC, adding that their de­ci­sions were also in­flu­enced by im­prove­ments in the elec­tric­ity provider’s ser­vice de­liv­ery.

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