Electricity consumers to pay more by 8.5%

ALVAR MWAKYUSA

POWER consumers will have to dig deeper into their pockets starting January 1, 2017, following an increase on electricity tariff by an average of 8.5 per cent which has been approved by the Energy and Water Utilities Regulatory Authority (EWURA). Consumers will now have to pay 263.02/- per kilowatt hour (kWh) up from 242.34/- currently charged, representing an increase of 20.68/- per unit.

The new increase is set to generate 1.608trl/- for the Tanzania Electric Supply Company (Tanesco) to enable it finance operation costs and undertake capital investment programmes.

The power bill hike, however, will not affect customers in DI category (low usage domestic customers who consume on average less than 75Kwh per month).

Customers in this category will continue paying 100/- per kWh but will be subjected to a rate of 350/- per kWh for any unit exceeding 75 kWh. The new increase comes few months after the industry regulator approved an application by the power utility to reduce tariff by between 1.5 and 2.4 per cent in April, this year, before Tanesco made a fresh application for an increment in October, this year.

In its application in October, Tanesco had asked the regulator to approve an increase of 18.19 per cent to enable it raise 1.9trl/- as it seeks to expand electricity coverage to 75 per cent of the population by the year 2025.

The state-owned power utility wanted an increase of power bill from 242.34/- per kWh to 286.28/- per kWh where generation costs were pegged at 155.35 per kWh while transmission and distribution costs were proposed at 23.76/- and 107.17/- per kWh.

However, at a news conference in Dar es Salaam yesterday, the Director General of EWURA, Mr Felix Ngalamgosi, said the proposed 18.19 per cent tariff hike was too high.

Almost all stakeholders who gave their opinions on the proposed hike were against the move, expressing concerns as to why the power utility wanted an increase in power bill few months after seeking the same to be reduced. These, according to Mr Ngalamgosi, included the Government Consultative Council (GCC), EWURA Consumer Consultative Council (EWURA-CCC), Zanzibar Electricity Corporation (ZECO) and the general public.

“The GCC reasoned that the increase may deter efforts by the government to promote industrialisation. It thus recommended unbundling of Tanesco in order to achieve operational efficiency,” Mr Ngalamgosi explained.

EWURA-CCC had expressed concerns that the hike would be a burden to power consumer, it thus recommended that Tanesco should focus on collection of outstanding debts from consumers and check losses of electricity during transmission and distribution.

ZECO on the on the other hand said it should be exempted from the distribution costs incurred by Tanesco since the latter does not distribute electricity in Zanzibar.

“During public hearings conducted in Mwanza, Mbeya, Arusha, Dodoma and Dar es Salaam, members of the general public were of the view that circumstances which led to tariff decrease in April, 2016, are still the same to date and hence no justifiable grounds for an increase,” Mr Ngalamgosi explained.

On the other hand, Mr Ngalamgosi said the industry regulator had approved an application by Tanesco to subdivide TI customer group to TIa and TIb. Tia category shall include residential, commercial and public lighting customers.

TIb on the other hand shall be composed of small industries, billboards and communication towers and this category shall be subjected to a monthly service charge of 5,520/-.

In February, this year, the power utility had presented a proposal to decrease electricity average tariff by 1.1 per cent from 274.9/- per kWh to 272.00/- per kWh effective from April 1, 2016 and further cut tariff to 7.9 per cent from January 2017.

The proposal also sought to abolish service charges to household consumers and remove charges imposed on customers requesting for power connection to their houses