WINDHOEK, 23 MAY (NAMPA) - The Electricity Control Board (ECB) has on Thursday approved NamPower's bulk tariff increase of 13,17 per cent for the period 01 July 2013 to 30 June 2014.
The tariff increase will not only affect the energy distributors, but will also lead to an increase in the distribution tariff of an average of 12 per cent to be imposed onto the end consumer.
?This is the maximum increase expected for those utilities that are not yet cost reflective to reach cost reflectivity. The increase will ensure that distribution utilities reach and remain cost reflective,? said ECB Chief Executive Officer Siseho Simasiku during a media briefing here on Thursday.
He indicated that after a thorough review process, the energy regulator has awarded a 13,17 per cent effective tariff increase to NamPower in order for the country's power utility to meet its costs and remain cost reflective.
Simasiku said the approved tariff increase will ensure that NamPower remains on the long-run marginal cost path to enable it to build up sufficient reserves to protect the Namibian consumer against shocks in the future, for instance when a new power station is brought on line.
He explained further that NamPower is pursuing various transmission and generation projects at present, all aimed at securing reliable supply to Namibia in the short and long term.
Furthermore, he said, extensive capital investment to address the supply shortage and security of supply locally shows that high tariff increases are necessary to balance the revenue requirement of NamPower in the short to medium term.
Simasiku said the proposed tariff increases makes provision for the year-on-year revenue requirement of NamPower, taking only actual costs and losses into account.
Last year, NamPower had increased its bulk electricity tariffs by 17,1 per cent, and Windhoek residents had to pay more for electricity after the City of Windhoek increased the cost of electricity by 15 per cent.