EWURA Endorses New Power Tariff From January 2014

BY PIUS RUGONZIBWA,

ELECTRICITY consumers will be forced to dig deeper into their pockets to foot their bills effective January. This follows the new tariffs announced by the Energy and Water Utilities Regulatory Authority (EWURA) in Dar es Salaam.

In the just-released "Multi Year Tariff Adjustment Order of 2013," the regulatory authority has approved an increase in tariff at an average increase of 40 per cent to last up to December 2016.

EWURA's Director of Regulatory Economics, Mr Felix Ngalamgosi, told reporters in the city that the tariff increment follows the application lodged by the Tanzania Electric Supply Company (TANESCO) in October, last year.

"The proposed tariff adjustment will enable TANESCO to meet its operational costs and capital investment programme (CIP), demonstrate its bankability to donors and increase capacity needed to meet system peak demand," he explained.

According to Mr Ngalamgosi, from January, next year, domestic power customers in the first category called D1; out of five outlined categories, will have to pay 100/- per unit up from 60/- they were paying before.

But as opposed to the present tariff, the number of consumers falling under the mentioned category has been increased to bring more relief to low-income earners who are seemingly regarded as the group enjoying the lowest tariff among the other categories.

While in the past this group was charged for power consumed from 0 to 50 units a month, this time the new tariff of 100/- each unit will be charged from 0 to 75 units per month pegged deliberately to accommodate more beneficiaries.

Another category is T1 in which consumers will have to part with 306/- for one unit, which is an increase of 85/- from the present tariff. Tanesco had applied for a 131/- per unit payment for this group.

"This group consists of larger domestic power consumers, small business operators, milling machine operators and the likes while the T2 category, whose consumption is over 7,500 units per month will have to pay 205/- per unit up by 73/- of the current charges," Mr Ngalamgosi pointed out.

For medium and high voltage consumers falling in T3 MV and T4 HV categories, the new charges per unit will be 166/- and 159/- respectively being an increase by relatively 50 per cent of the present tariffs.

EWURA said it was satisfied the proposed multi-year tariff and charge increase by TANESCO were reasonable, save for some few elements which were adjusted to suit the tariffs enquiry and evaluation process.

According to the authority, however, an analysis showed that TANESCO' proposed fuel adjustment formula lacked some regulatory monitoring parameters such as Specific Fuel Consumptions of thermal plants.

Apart from raising the tariffs, Mr Ngalamgosi said comparison of the electricity tariffs in East Africa reveals that Tanzania's new tariffs, particularly for commercial and industrial consumptions, are still lower save for differences in tariff structures, policies, taxes and levies.