Africa-Press – Lesotho. The Lesotho Electricity and Water Authority (LEWA) has declined the request by the Lesotho Electricity Company (LEC) seeking tariffs increase of 32.6 percent across the board for the
2020/2021 financial year. This is according to the statement issued by LEWA following its governing board sitting on July 30.
LEWA was set to make its pronouncement on April 29 which was to be enforced effective from May 1, however owing to the then Covid-19 inspired lockdown it deferred
the tariff review at the end of July. “There will be no tariffs increase on the energy and Maximum Demand (MD) charges for all customer categories in 2021,” reads the
regulator statement in pertinent part. It further says the proposed increment is “not consistent with LEWA Regulatory Principles and Guidelines. ” On the LEC’s revenue requirement of M1, 21
billion, LEWA made resolution that it be at M933, 48 million. One of the reasons the regulator advances against considering LEC proposed tariffs hike is that the utility has fallen short of complying with the regulatory
prescripts. LEWA said in their application, the power utility had not availed audited financial statements of the company financial performance adding that
“there is public outcry over LEC’s continued non-accountability.
“It is important that the electricity tariffs be affordable to domestic and businesses especially now that the country is
experiencing Covid-19 pandemic which has brought about negative consequences particularly the economic meltdown,” reads the statement. Reacting to this determination, the Consumer
Protection Association (CPA) Executive Director Nkareng Letsie said the association is happy with the decision taken by the authority. Letsie said due to prevailing economic
circumstances, LEC should exercise stringent measures. He said during the public consultations fora, CPA had said that the utility company be afforded 6 percent tariff increase
which they had argued it will cushion the latter against the inflation. “Poor people cannot afford the increase given the poor economic performance and growth that does not translate into welfare
improvement of the lower class of the society,” CPA had said then. Meanwhile, Letsie had highlighted that the government through rural electrification is “burdening” LEC saying the
electricity company procures equipment at high costs, and some families do not use electricity while others use less. “How is it [LEC] going to recuperate the
returns,” he charged. Motivating their application, LEC had said it is unable to raise funds to meet the rural electrification and said the country is faced with power shortage to spur the economy.
They had also talked about high import costs from Eskom and Electricidade de Moçambique (EDM). In the last financial year, 2019/2020, LEC had requested a 14.2 percent hike increase and it was granted 13.87 percent.
LEWA is a water and electricity regulatory body, which is also charged with the responsibility to ensure that the quality of service and supply standards are met by LEC and Water and Sewage Company (WASCO).
According to Lesotho Energy Policy 2015-2025, the country generates 72 megawatts (MW) and it says by the end of 2013 electricity imports met over 50 percent of local consumption.
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