By Kefiloe Kajane
The Lesotho Electricity and Water Authority (LEWA) board this week deliberated on the review of the Lesotho Electricity Company (LEC)’s tariff application for the financial Year 2021/22.
LEWA’s chairman of the board, Relebohile Mosito. said the board has decided that LEC be allowed a revenue requirement (RR) of M1. 07 billion instead of M1.241 billion that the company had requested.
He said the board decided that LEC’s tariffs be increased by 10 percent for both energy and maximum demand (MD) for all customer categories instead of 30 percent.
“In accordance with the existing legal provisions, LEC submitted a tariff application in which it requested RR of M1.241 billion and a resultant tariff increase of 30 percent for the financial year 2020/21.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 LEC tariff application, LEWA considered several factors including, but not limited to the prevailing socio-economic environment, sustainability of LEC, impact of the Covid-19 pandemic and affordability of electricity tariffs by various customer categories in the country,” he explained.
He showed that in order to conform to the Covid-19 regulations and applicable restrictions, LEWA requested stakeholders to submit written views, facts and evidence on the tariff application through social media platforms. He added that comments were received from various stakeholders and were reviewed during the process leading to the tariff approval.
Mosito explained that a decision was that the current charges for connection, wiring testing, wiring re-testing, survey, re-survey, licensing for wiring, meter testing as well as house extension must remain the same and the approved tariffs be effective from October 2021.
He said the board’s decision was taken based on the facts and evidence presented to the authority by both the company and the public, including the prevailing social, economic, and financial environment due to the impact of Covid-19 pandemic. It was concluded that justification advanced by LEC for M1.241 billion RR was not adequate.
He explained that amongst other things, the authority took into consideration that the allowed RR will be sufficient for LEC to operate effectively, pay imported electricity, replace its aging infrastructure and carry out repair and maintenance essential for the reliability of electricity supply.
LEC managing director, Mohato Seleke, said LEC would release an official statement in 10 days on the way forward after tariff review by LEWA.
“We are very positive by the decision taken by LEWA because they are our guardians. So in 10 days we will announce our new plans for the financial year and the way forward,” he briefly commented.
