25 Aug 2020

Botswana Energy Regulatory Authority (BERA) recently convened a public enquiry on Botswana Power Corporation’s (BPC) application for an increase in electricity tariffs.

Speaking on the sidelines of the event, which brought together different stakeholders, the Chief Operations Officer of BERA, Mr Duncan Morotsi acknowledged that BPC had submitted an application for a tariff increase on March 2020, with concerns that high cost overruns for the utility could not sustain production outputs.

He noted  that BPC had previously been granted a tariff hike of 22 per cent for the year 2019/2020, which had been received with mixed emotions by consumers, adding that BERA would not take any decision without careful consideration.

He added that the five per cent tariff hike that the utility was seeking would be subject to critical assessment to determine its merits.

“The BERA Act empowers the authority to review the prices of costs, but at this instance BPC has initiated the application,” said Mr Morotsi.

He however noted that all stakeholders would be given the opportunity to review and appraise the request.

Meanwhile, the Acting Chief Operations Officer of BPC, Mr Edward Rugoyi said a five per cent tariff increase would enable the utility to get adequate revenue to produce electricity more effectively and cost effectively.

Making a case for the tariff increase before the public inquiry, he noted that the country’s current tariffs were below the cost of providing the service, thus prompting the application. He noted that consumers needed to be aware of this and appreciate the situation in order to get quality service.

Mr Rugoyi said the proposed tariff did not take into account inefficiencies experienced with Morupule B, as that project was currently being subsidised by government.

“All assets funded by government are excluded from the tariff,” he said.Instead he said the maintenance cost of ownership would be the only things included in the tariff that BPC was seeking. 

Mr Rugoyi however said the government subsidy, which cushioned Morupule B had continued to decline by P1.7 billion in the last five years, which indicated that it was no longer suitable to cushion the cost.

He added that the subsidy would come down to zero in the next three to four years, where BPC was expected to now be a self-sustaining entity.

He however could not dismiss that Morupule B would not be successful, once the refurbishment were complete. ends