Mbabane: Eswatini Electricity Company (EEC) has be approved to hike domestic electricity tariffs by 3 percent effective from April 1, 2021.
This comes after EEC applied for tariff hike for its fourth multi-year price determination period (MYPD4) (2021/22- 2022/23). The request was received on October 30, 2020.
The tariff hike was revealed by Eswatini Energy Regulatory Authority (ESERA)’s Chief Executive Officer Vusumuzi Mkhumane in a press statement released on Monday, February 01, 2021.
“The Eswatini Energy Regulatory (ESERA) has reviewed the tariff application from the Eswatini Electricity Company (EEC) in terms of the provisions of the Electricity Act of 2007, Electricity Regulatory Act of 2007 and the Eswatini Tariff Methodology,” reads the statement.
According to the statement, EEC requested a revenue requirement of E2.55 Billion for 2021/22 and E2.93 Billion for 2022/23, translating to an average tariff increase of 7.16 percent for each of the years under consideration. EEC proposed to spread the tariff adjustment across the different customer categories and revenue streams as follows; 10 percent increase proposal for domestic customers, 6.8 percent non-time of use business customers energy change, 7.22 percent of Time of Use business customers energy charge, and 4.06 percent for demand and access charges.
ESERA said coming up with the decision to adjust the current tariff levels, the following parameters were considered;
- A rate of return of 7.28 percent for EEC to meet the cost of raising capital.
- A projected tariff increase of 10.16 percent and 15 percent from Eskom for the years 2021/22 and 2022/23 respectively.
- A net over-recovery of E212 Million for the financial year 2019/20.
- The various inputs and submissions received from electricity stakeholders.
The energy regulator said the tariff hike is attributed to the prevailing economic conditions and the negative effects brought by the COVID-19 pandemic.