Electricity, water hikes loom



Bereng Mpaki

CONSUMERS have been urged to find alternative forms of energy to ease their financial burden in light of ever increasing electricity costs.

This was said by Lesotho Electricity and Water Authority (LEWA) Acting Chief Executive Officer Thuso Ntlama during a media briefing this week convened to announce proposals for electricity and water tariffs increases.

As the regulator of the Lesotho Electricity Company (LEC) and Water and Sewerage Company (WASCO), LEWA considers the merits of the proposals after holding public hearings on the proposed increase.

Mr Ntlama said LEC had proposed a 16.9 percent hike for electricity tariffs while WASCO requested a 10 percent increase in water charges. He said LEWA was in the process of reviewing the two applications with a decision expected within three months after soliciting the views of stakeholders and the general public.

“LEC has requested for a 16.9 percent tariff increase for a revenue requirement of M964.5 million in its 2017/18 operations while WASCO has requested a 10 percent increase in water charges for a revenue requirement of M257.3 million for 2017/18,” said Mr Ntlama.

“WASCO is requesting an upward tariff adjustment of 10 percent to the existing volumetric tariffs and standing charges for all bands except band A.”

Among the reasons WASCO cited for the proposed increase is the need to undertake preventive maintenance for key infrastructure, rehabilitating reticulation systems, operating the Metolong dam water treatment facility and its related infrastructure as well as improving performance.

“WASCO also proposes to augment key personnel in selected operations areas, in particular Metolong,” he said.

The parastatal also submitted some of its major cost drivers such as manpower at M110.5 million, power at M25.4 million, chemical usage at M8.5 million, reticulation and plant maintenance at M21.6 million, administration costs at M33.5 million, water and sewerage connections at M20.5 million and deprecation at M18.0 million.

For its part, LEC is requesting an approval for a tariff increase of 16.9 percent for both energy and maximum demand (MD) charges.

Bulk electricity, which is pegged at M432.8 million, accounts for the largest part of LEC’s cost breakdown, followed by operating expenses at M268.5 million, depreciation at M116.4 million, return on assets at M100.5 million, maintenance costs at M44.6 million and diesel for Semonkong at M1.7 million.

In the current financial year, a 12 percent tariff increase and M755.32 million were approved for LEC, while eight percent water tariffs hike and M234.18 million revenue requirement was approved for WASCO.

Asked what consumers could do to mitigate the effects of the anticipated tariffs increases, Mr Ntlama said finding alternative energy sources was key to reducing energy costs.

“I think demand side management is crucial to mitigate the increasing prices of electricity. For instance, consumers can install solar-powered geysers in their homes in order to reduce the load on LEC power especially during peak hours like in the morning when everybody needs hot water before going to work.”

Public hearings on the proposed increase are scheduled for 3 February 2017 in Mohale’s Hoek, 16 February 2017 in Hlotse, and 3 March 2017 in Maseru. Comments from stakeholders and the general public are invited until 1 February 2017.

The LEWA Board is expected to announce its decision on the two applications from 6-7 April 2017.


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