Niël Terblanché
The Regional Electricity Distributor of Erongo announced that consumers of the electricity it sells have increased by nine percent and that prices will be reviewed in June 2024.
According to Nico Niemand, the acting Chief Executive Officer of ErongoRED, the Electricity Control Board (ECB) earlier this year approved an average tariff increase of nine percent for NamPower.
Niemand said that the ECB announced that NamPower’s average tariff will increase from N$1.82 to N$2.12 per kilowatt hour for the 2023/2024 financial year.
“This constitutes a weighted average increase of 8.97 percent, however, the actual impact to Erongo RED is 9.9 percent,” he said.
Niemand said that after engaging different stakeholders such as the Board of Directors, Shareholders, and Consumer Liaison Committee, Erongo RED submitted an application to the ECB) for tariff adjustments for the 2023/2024 financial year.
“After reviewing our application for the tariff adjustment, the ECB approved a weighted average of nine percent tariff adjustment. The impact on customers will vary depending on individual consumer consumption patterns and the type of connection,” he said
According to Niemand, NamPower receives 70 percent of the selling price while the remaining 30 percent is utilised by Erongo RED for its operations
He added that the ECB Levy will remain unchanged for the period of 12 months. Similarly, the National Energy Fund (NEF) Levy will also remain unchanged because the Ministry of Mines and Energy did not indicate of such an increase is necessary.
“These tariff increases are not unique to our region. The bulk tariff increase will be applied country-wide. Apart from the bulk tariff increase by the national utility, there are also other factors such as operations and maintenance costs, customer service, overheads, and working capital. All these factors have an impact on the input cost to bring electricity to the end users,” he said.
He said that ErongoRED had to look for all possible ways to cushion the impact on customers while at the same time ensuring that service delivery is not compromised. “We resolved to continue with the subsidized tariffs for pensioners and low-income consumers in our community,” he said.
Niemand appealed to pensioners to re-register in order to continue to benefit from the subsidized tariffs.
He added the purpose of the re-registration is to mitigate the risk of misuse of the scheme by those who are not supposed to be on the pensioner tariff.
Niemand also urged members of the community who qualify for social tariffs to apply.
“It should be noted that the terms and conditions will apply to customers who wish to apply for social tariffs in line with our Social Tariffs Policy,” he said.
According to Niemand, the upward adjustment of tariffs are necessary for ErongoRED to continue to provide services to consumers.
“Not adjusting the tariffs will compromise our service delivery capability to the customers,” he said.
Niemand mentioned that ErongoRED was not affected by NamPower’s Debt Collection Plan.
“Our account with NamPower is current and thus all our stakeholders can be rest assured that the power supply to the region will not be disconnected,” he added.
He urged all customers of ErongoRED to continue supporting the company by settling their accounts on time.
“This will allow us to pay NamPower on time and ensure that electricity services continue uninterrupted,” he said.
Niemand mentioned that ErongoRED, in an effort to cushion the impact of rising electricity prices on consumers, will aim to continuously reduce expenditures.
“We are in the process to explore alternative sources of cheaper electricity. In our efforts to diversify our energy mix, the Board recently approved a 20MW solar project. Soon the company will advertise the tender to appoint a suitable strategic partner for the development of this project,” he said.
According to Niemand, ErongoRED will implement some strategies to ensure the sustainability of the business and also to ensure that the company can manage and pass lower electricity prices to consumers.
“I strongly believe that with support from all our stakeholders, we will be able to stabilize the tariffs in years to come,” Niemand said at the conclusion of the announcement.
