Calls for electricity tariff subsidy
PHUMLAMCASHI – Sugar cane farmers have called upon government to subsidise electricity tariffs.
The farmers said this during an electricity consumers’ feedback session last Friday at Phumlamcashi Community Training Centre, Siphofaneni. The meeting was organised by Eswatini Energy Regulatory Authority (ESERA) and its purpose was to explain to electricity consumers what influenced the tariff increase, which would be effective from Saturday April 1, 2023. Mduduzi Vilakati, a sugar cane farmer, lamented the high costs of electricity yet they needed it for cane irrigation. He said the best solution to address this challenge was to have a government subsidy.
“We are asking ourselves that if government cannot intervene in this electricity tariff issue, then we are doomed,” he said. Vilakati mentioned that in other countries, governments subsidised electricity tariffs and wondered why that was not the case locally. He said expenses were now higher than their income ‘which meant that our businesses must close’. “Sugar cane farmers are getting out of business because of high electricity tariffs,” stated Vilakati.
Challenges
He said farmers were faced with serious challenges such as increasing water tariffs and high fertiliser prices. He also noted that their employees now financially benefitted more than the farmers themselves in terms of the gazetted wages. A consumer, Simon Ngcamphalala, wanted to know what benefit customers derived when Eswatini Electricity Company (EEC) declared an over-recovery in its financials.
ESERA General Manager Regulation Simphiwe Khumalo explained that there were power plants to be constructed, which could help reduce tariff since over reliance on importing energy would go down. He said the regulator was mandated by government to look for companies to generate electricity locally and supply it to EEC. He said ESERA began the process to search for these companies in 2019 by looking for those that would generate solar power.
“We are about to conclude that process by securing companies that will supply us with about 75 Mega-Watts (MW) of solar power,” said Khumalo. He added that in 2020 the regulator started searching for companies that woul generate electricity through bio-mass. He said the process was ongoing and would be concluded in a few months.
Khumalo further mentioned that consumers’ benefit from EEC over-recovery was that the funds assisted in cushioning the electricity tariffs. He noted that it would be impossible for consumers to financially benefit individually, but the cushioned tariff was the most realistic.
Supply
ESERA was established with the primary and core responsibilities of exercising control over the electricity supply industry and ensuring the security of supply of electricity through the issuance of licences and the regulation of electricity tariffs and quality of supply and services.
Meanwhile, it was the first time in the history of ESERA to give feedback to consumers last Friday at Phumlamcashi.
The next session would be held on Friday April 14, 2023 at The George Hotel in Manzini, starting at 9am. ESERA Chief Executive Officer (CEO) Sikhumbuzo Tsabedze said these sessions were as a result of consumer concerns that their contributions during public hearings were never considered in the tariff review decision-making process.
He said it was, therefore, important that the regulator explained its decision in the most transparent manner possible.
He also noted that some social media comments were to the effect that public contributions were ignored and preference given to EEC. Tsabedze mentioned that the regulator understood consumer grievances on the tariff hike. “The regulator was formed to be the mediator in ensuring that the electricity supplier survives and protects consumers from high electricity costs,” he said.To emphasise how transparent ESERA was in its functions, Tsabedze said the public was allowed to attend the regulator’s Board meetings. “That is how a regulator must operate. High level of transparency. The one meeting you may not attend is when a Board member has declared that there is a confidential issue to be discussed,” added Tsabedze. Eswatini Cane Growers Association (ECGA) Chief Executive Officer (CEO) Dr Sipho Nkambule thanked ESERA for taking the initiative to update consumers on the tariff hike. “These sessions are important for us so that we know how the regulator reached the tariff review decision,” he said. “It will also help us to make informed contributions when we come again after two years for another tariff review.”
Hearings
Thandwa Dlamini, ESERA Consumer and Stakeholder Management Officer, added that the feedback session was a culmination of public hearings which were held in November and December last year in all regions of the kingdom.
She noted that it was important that consumers were consulted before a tariff review decision was reached, hence the public hearings.
She said consumers made submissions and expressed opinions during public hearings, after which, the regulator promised to bring feedback. “That is why we are here today to present feedback to consumers,” said Dlamini. ESERA will announce dates, venues and times for other feedback sessions.