MASERU, Lesotho – The Lesotho Electricity Company (LEC) has this week increased tariffs by 10% starting on 1 October 2021.
The increase comes after the Lesotho Electricity and Water Authority (LEWA), under whose purview the LEC operates, granted the power utility company a 10.37% hike.
The increase means that household consumers must now fork out R0.80 for a unit of electricity when they used to pay R0.73 per unit.
But the increase is just 30% of what the LEC had applied for. The company had applied for a 31% increase for the 2021/22 financial year. The increase was meant to cushion the company’s operations in line with increases in prices of key inputs.
In its 2021/22 tariff review application to LEWA, the state-owned utility company said that it would need a minimum of R1.241 billion to finance its operations.
However, LEWA chairperson Rebohile Mosito, this week said the LEC would only be granted a 10.37% increment to enable it to generate R1.07 billion instead of the R1.241 billion it had projected to make.
“The LEC submitted a tariff application in which it requested a revenue requirement of R1.241 billion and a resultant tariff increase of 30.9% for the 2021/22 financial year,” Mosito told journalists in Maseru.
“Tariff reviews are conducted to ensure that regulated utilities charge appropriate tariffs to collect sufficient revenue to enable reliable and efficient operations at affordable charges.”
In determining the new tarrifs, LEWA considered several factors including the prevailing socio-economic environment, the impact of the Covid-19 pandemic and the affordability of electricity tariffs by customers, Mosito said.
He said on the basis of the information presented to it by the LEC and the public, LEWA found no justification for granting the increment sought by the power utility.
“In line with the existing Covid-19 regulations and restrictions, LEWA requested stakeholders to submit written views, facts and evidence on the tariff application via social media platforms.
“Among other things, LEWA took into consideration that the increment that it approved will be sufficient for the LEC to operate effectively, pay for imported electricity, replace its ageing infrastructure and carry out repair and maintenance works that are essential for a reliable electricity supply,” Mosito said.
He said the current charges for electricity connections, wiring and testing should remain unchanged.
This year’s hike comes on the back of two consecutive years where there were no tariff increments. Last year LEWA resolved not to increase tarrifs to cushion the public and other customers from the negative impact of the Covid-19 pandemic.