LEC hikes power tariffs by 7.9%

LEC hikes power tariffs by 7.9%
LEC hikes power tariffs by 7.9%

Africa-Press – Lesotho. From today it will cost you more to keep the lights on. The Lesotho Electricity Company (LEC) has increased power tariffs by 7.9 percent. The new tariffs were approved by the Lesotho Water and Electricity (LEWA) yesterday.

The increase would be on both energy and maximum demand charges across all customer categories for the Financial Year 2022/23. The increase is bad news for consumers who are already struggling to keep up with the surging prices of basic goods and services.

The prices of basic commodities have been galloping over the past two years. So has the cost of fuel, education and transport. Meanwhile, salaries have largely remained stagnant or marginally increased.

Thousands have lost their incomes after being retrenched in the textile factories where several companies have either shut down or scaled down. Yet the news from LEWA could have been worse because the LEC wanted a 41.3 percent increase which it claimed would fund its proposed budget of M1.4 billion.

In its application, the LEC said its proposed tariffs were based on cost drivers like bulk supply, labour, financing, licence fees, repairs, maintenance and operations.

The LEWA said it assessed the LEC’s application for compliance with Regulatory Instruments 1 and it was found to be materially non-compliant and the authority communicated this decision through a letter to the LEC on May 12.

The LEC then submitted a Modified Tariff Review Application on September 19. “As a standard practice, the Authority conducted public consultations to solicit comments and inputs from the stakeholders,” LEWA said.

“The general opinion emanating from public consultations was that the Company’s tariff increase should be within the range: 0% to 8%.
LEWA’s board eventually settled for 7.9 percent which would generate M1.128 billion which the authority said “will not only be adequate to cover the company’s prudently incurred costs but will also ensure affordability of electricity by the consumers”.

The increase is on both energy and maximum demand. LEWA said it considered several factors including low economic performance and high inflation resulting from lingering negative effects of Covid-19 pandemic and the on-going Russia-Ukraine war.

LEWA also decided that charges for connection, wiring testing, wiring re-testing, survey, re-survey, licensing for wiring, meter testing and house extension for the Financial Year 2022/23 will remain similar to those that applied in the Financial Year 2021/22.

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