Electricity tariffs to go up by 40 per cent January 1

Electricity consumers will mark New Year with a heavy burden of meeting energy costs in the wake of a steep increase in power tariffs announced yesterday by Energy and Water Utilities Regulatory Authority (Ewura).

Ewura Director of Economic Regulation Felix Ngamlagosi, said yesterday that tariffs had been increased by an average of 40 per cent for domestic users, and the new rates would come into effect on January 1, 2014.

This means that domestic consumers – those who use up to 75 units of electricity per month – will now pay Sh100 per unit, up from Sh60. Initially, this group had those who used less than 50 units.

Those who consume anything above 75 units but who are within the domestic consumption category will pay Sh350 for a unit, Sh77 more than the previous rate.

According to Mr Ngamlagosi, the new rates for all categories of electricity consumers will last for three years. This means that Tanzania Electric Supply Company (Tanesco) will only be allowed to ask for another tariff increase after December 31, 2016. In line with the new tariffs, power users in the T-1 category, who used to pay Sh221 for every unit of electricity they consume, will now pay Sh306 per unit (38.46 per cent or Sh85 more. 

The T-1 segment is applicable to groups of customers who use power for general purposes, including residential, small commercial and light industrial use, public lighting and billboards. This is the group to which the majority of electricity consumers in the country belong.

Similarly, consumers who fall under T-2 will, starting next month, pay Sh205 for every unit of electricity they consume, up from Sh132.

T-2 is applicable for general use where power is metered at 400V and average consumption is more than 7,500kWh per meter reading period and demand doesn’t exceed 500KVA per meter reading period.

According to the rates approved by Ewura yesterday, consumers in the T-3 category will from next month be paying Sh45 more to buy a single unit of electricity. Their new rate will be Sh163. Before the new rates, they were paying Sh118 for a unit. T-3 refers to consumers within the general use category where power is metered at a high voltage line of 11KV and above.

In the same vein, those categorized under T-3 HV will have to pay Sh159 instead of Sh106 per unit (an increase of Sh53).

“This order shall come into force on January 1, 2014…The approved tariffs imply an average increase of Sh39.19 per cent compared to the current tariffs,” reads part of the Ewura statement.

 “The approved tariffs and charges shall remain in force until December 31, 2016 unless results of cost of services study that will be undertaken in 2015 will recommend new tariffs,” the statement further says.

Ewura further said that the new rates were determined by the new formula for fixing power tariffs which was adopted from the 2012 cost of service study performed by an independent consultant, AF-MERCADOS which takes into account sustainability of electricity services in the country.

The new tariffs fixed by the regulator are in response to applications filled by the Tanzania Electric Supply Company (Tanesco), in October this year requesting Ewura to hike power tariff at 67.87 per cent effective from October 2013, 12.27 per cent effective from January 2014 and another increase of 9.17 per cent effective from January 2015.

Moreover, Ewura director of electricity business, Mr Anastas Mbawala, said that in imposing such power rates, the regulator had also imposed 10 terms of reference for Tanesco, one being the power utility parastatal to submit to the authority a monthly report on actual generation and planned generation of electricity and second to ensure that the projects are implemented in line with the Power System Master Plan.

Other terms of reference include; submission of quarterly reports on the supply and reliability of data of 11kv, 33kv, 132kv and 220kv by region for verification including total number of customer interruptions and total customers served, submission of demand side management, revenue management, reducing technical and non-technical revenue losses, fighting illegal connections and electricity theft and submission of report of installation of LUKU metres and Automatic Meter Readers.

Other terms are submission of quarterly reports on collection of revenue from debtors, enhanced customers education of their rights, submission of application of tariff adjustments in line with changes in fuel cost, inflation and currency fluctuations, providing the regulator with information on business performance and submission of implementation plan of this order before 31st March 2014.

Commenting on the hiked power tariffs, the president of the Tanzania Chamber of Commerce, Industry and Agriculture (TCCIA), Mr Peter Chisawilo, said that members of the business community were set to meet to discuss the matter so that they decide on how to move forward.

Mr Chisawilo said that it was imperative for members of the business community to know the impact of the hiked power tariffs on the competitive strength of commodities produced in the country in the East African market.

“We will definitely meet to discuss the implications of the new power tariffs on the business performance in our country in relation to our counterparts under the East African Community,” he said.
Source: The Citizen, reported by Ludger Kasumuni from Dar es Salaam,  Tanzania
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