KATIMA MULILO – Katima Mulilo residents and senior politicians have questioned the rationale behind the Northern Regional Electricity Distributor’s proposed 7% tariff hike.
According to them, such an adjustment is harsh in the face of unfavourable economic conditions.
They registered their consternation during a consultative meeting hosted by Nored and the Electricity Control Board (ECB) of Namibia in Katima Mulilo this week.
The purpose of the meeting was to gauge views from consumers on Nored’s proposed 7.7% electricity tariff increase.
Over a month ago, Namibia Power Corporation (NamPower) requested a 14.59% increase in electricity tariffs from the ECB for the 2024/25 financial year.
The proposed increase would raise the average transmission customer tariff from 198.56 c/kWh to 227.53 c/kWh.
This adjustment changes the average tariff from the current approved rate of N$1.9856 to N$2.1444 per kilowatt hour (kWh) for 2024/2025.
For 2025/26, the ECB expects an average bulk tariff of N$2.4512, for 2026/27 to increase to N$2.6733, for 2027/28 to N$2.7747, and for 2028/29 to N$2.9066.
The proposed combined tariffs, on average, include residential, social, general, general demand, institutional, institutional demand and special flat, which is general and institutional prepaid.
Considering the bulk tariff adjustments, the ECB last month urged distribution licensees, including regional councils, local authorities, large industrial transmission customers and regional electricity distributors (REDs) to apply for tariff upgrades.
Acting Nored CEO Toivo Shovaleka defended the tariff application, saying the overall 7.7% tariff increase applied to the ECB for approval is below the increase announced by NamPower’s 8% tariff adjustment.
“We can apply for an average 7.7% tariff increase. We are not even matching the 8% of the national power utility. We think the 7.7% will be reasonable for us to ensure business continuity, and be able to serve you as end-users,” he stated.
Although the session was poorly-attended, Katima Mulilo residents present opposed the proposed increase.
“Do you think the proposed increase is realistic, looking at other factors and inflation rates? Do you also think the classifications are fairly done – for example, institutions, businesses and domestic categories? Don’t you think there is a need to reconsider this?” unhappy resident Jacob Mahunga asked.
Also in attendance was Kabbe South constituency councillor John Likando.
“I am a bit worried. We feel Nored’s restructuring might also be a liability in which it finds itself. I am pushing to resolve all these issues. We need the electricity supply industry conference. You need light to see and cook. It only happened once when the ECB reduced the rates some five years ago.
The biggest challenge is to review the process that Nored started with – and hopefully, it can also apply to the reduction of tariffs. We need to harmonise these charges to serve the citizens,” Likando stressed.
Judea Lyaboloma constituency councillor Humphry Divai is hopeful the public’s views will be considered.
“Indeed, our people are suffering already because of the high increase in commodities, and now the increase of 7.7% by Nored will increase people’s poverty. The ECB needs to take into consideration that our people are already suffering, and we can’t go as high as a 7.7% increment,” he reasoned.
Another resident, Percy Mashebe, asked what prospects Nored has in terms of infrastructure development for Katima Mulilo, resulting in short-term employment opportunities for them.
To this, the acting CEO was quick and responded that there was an advertisement in local newspapers last week regarding a project between Nored and the European Union Bank on electrification projects in Zambezi up to the Kunene region.
“It will bring local employment. We will invite expressions of interest. Those are some of the prospects,” Shovaleka said.
In addition, the ECB’s executive for economic and market regulation Pinehas Mutota said the regulatory body is going to investigate the reasons given by Nored in its tariff application for 7.7%.
One of the reasons advanced by Nored includes the fact that NamPower also increased its tariff by 8%.
“It is for us to take note of your concerns, and then we review the application on the proposed tariff by Nored,” he said.
The public has until 31 May 2024 to submit their written submissions before the ECB finalises the review process.
The next sessions on the proposed tariff application will be held in Rundu, Oshakati, Ondangwa, Opuwo, Otjiwarongo, Swakopmund and Keetmanshoop before heading to Windhoek.