ESCOM, PML Propose a 99% electricity tarrif hike

The Electricity Supply Corporation of Malawi and Power Market Limited have proposed a 99 per cent electricity tariff increase for the four year period.

The proposal which has been submitted to the Malawi Energy Regulatory Authority has applied the increase of the tariff to be effective October 2022 to October 2026.

The two power utility companies have asked the immediate adjustment to K187.98 per kilowatt per hour from the current K104 per kilowatt per hour and later be increased to K249.15 per kilowatt per hour in 2025/26.

“The proposed Revenue Requirement is based on cost recovery principles to allow the licensees to cover cost of service to customers and improve financial sustainability, ” reads part of the proposal.

Escom last week cried that the company has registered a loss of K112 billion since its unbundling in 2018 to non-cost effective tariffs and the body’s Chief Executive Officer Kamkwamba Kumwenda implored mera to lobby for the upward adjustment of the tariffs for the survival of the company.

“Escom buys electricity from producers, Egenco at K140 per kilowatt per hour but we sell it at K104 per kilowatt per hour. We are still using the 2018-2022 Base Tariff Schedule, as such we are making losses triggered by the devaluation of the Kwacha, ” said Kamkwamba.

Meanwhile, Malawi Energy Regulatory Authority through the consumers affairs and public relations manager, Fitina Khonje says the proposal will have to be scrutinised by the public and other stakeholders before they approve it.

“We cannot approve the proposal by Escom at this point. We have to engage stakeholders and consumers to scrutinise it before a final mutual decision is made.

“We have to hear from our stakeholders and consumers. This is rigorous process requiring detailed loot at,” said Khonje.

In reaction to the proposal, Consumers Association of Malawi (Cama) executive director John Kapito says the development will hurt the consumers at a time the time the citizens are also facing the plight from economic woes.

“The development hiking tariffs creates a lot of confusion and at a time when we thought Escom is performing poorly due to prolonged blackouts. We all know that Escom has failed, so there is no need of rewarding them with such hiking,” said Kapito.

Reacting to the proposal, the Parliamentary committee on Natural Resources and Energy says it will not support thw development arguing that Malawians are already being subjected to tough economic challenges.

The committee’s chairperson Weleni Chilenga has alleged that tue power supplying company us pushing for an increase just to cover up mismanagement of resources, as the company announced to have made losses of K112 billion since 2018.

The position comes as some independent power producers have accused ESCOM of not being sincere to Malawians on how much they are purchasing the electricity. Experts say, 98 percent of electricity in Malawi is generated by hydro- and- the highest sale is less than K40 per kilowatt, per hour.