COST TO SUPPLY ELECTRICITY TO COME UNDER SPOTLIGHT

MBABANE – Businesses have only two weeks to undertake a study to determine the actual costs of supplying a unit of electricity to each consumer class.

Explaining what prompted SERA to undertake this study, whose deadline will be on August 2,  Manager Consumer and Stakeholder Management Sikhumbuzo Simelane explained that the Eswatini Electricity Supply Industry was failing to attract investment in generation.

He said one of the reasons for this had been identified to be the absence of a cost-reflective tariff.

Tariffs

“Businesses in general prefer investing elsewhere because industrial and commercial tariffs in Eswatini are considered high.

‘‘To assist in developing informed solutions to address these challenges, the Regulator resorted to examining the current level of tariffs visa vi cost-reflectivity with a view to gradually introduce cost-reflective tariffs,” said Nkambule.

He explained that the cost of supply study indicated what a cost-reflective tariff should be, and subsequently, one could be able to compare the current tariff with a cost-reflective tariff.

Achieved

“It is important to highlight that it is unlikely that cost reflectivity will be achieved by 2019, but the cost of supply study will also assist in determining the best approach to achieve cost reflective tariffs – both with regards to tariff level and timeframe,” said Dlamini.

Asked how would the study complement other similar studies or regulatory instruments or frameworks that they had undertaken recently, Nkambule said following an approval of the subsidy framework, which aims at introducing cost-reflective tariffs while shielding indigent consumers from the price hikes, the cost of supply study would not only help ascertain what a cost-reflective tariff would be, but also guide the amount of subsidy that the industry can offer to the needy.

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