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Business News Thu, 20 Jun 2019

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Release new electricity tariffs now – ACEP

The Africa Centre for Energy Policy (ACEP) has expressed worry over the delay by the Public Utilities Regulatory Commission (PURC) in communicating new tariffs in the country.

PURC announced in February this year that the new tariffs would take effect from 1 July 2019, following the mandatory major tariff review consultations in January this year.

In a press statement issued on 27 February 2019, the Commission stated that its decision to postpone the announcement of the tariff to July was “… due to critical emerging issues in the sector which are expected to affect the final tariff setting. Amongst others, the emerging issues are related to the planned relocation of the Karpowership Plant resulting in fuel switch savings from Heavy Fuel Oil (HFO) to Natural Gas. Secondly, reductions in the price of natural gas are anticipated due to ongoing negotiations by government. These matters are outside the purview of PURC but their outcomes are likely to have measurable impact on the Commission’s decision.”

The shift in effective date of the major tariff was therefore to allow the Commission to accommodate the important variables it expected would influence the tariff.

The practice has been that new tariffs are announced at least two weeks prior to effective date. This is to allow stakeholders to adjust their systems and budget to accommodate the new tariff.

ACEP in a statement, however, is worried that 11 days shy of the proposed 1st July tariff effective date the tariff has not been announced.

“ACEP does not expect the Commission to, within few days to the effective date, ambush electricity consumers with the new tariff which holds about 90% chance of upward adjustment. This is because doing so potentially distorts the plans of consumers significantly, particularly the business community whose investment decisions have been held hostage by the uncertainty in the expected tariff adjustment level,” the statement said.

ACEP said its interactions with key consumers of electricity show that anxiety is already high within the business community and expects the Commission to be fully sensitive to the realities on the ground in order not to inject unnecessary shock into plans of consumers and, by extension, the economy.

ACEP is, therefore, calling on the Commission to communicate to consumers what its intentions are, as to whether it will extend the effective date of the tariff or immediately announce the tariff, to allow consumers time to absorb and adjust to the changes, whatever that may be.

Source: Class FM

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