Why EEC Wants A 21.3% Tariff Hike


The Eswatini Electricity Company notes that current electricity prices do not cover the full costs of supplying electricity across the various tariff categories. The company states that it recognizes the impact of tariff increases on the economy and households, especially small businesses and low-income earners.


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By Ntokozo Nkambule

The Eswatini Electricity Company (EEC) has applied for a tariff hike of 21.31% from the Eswatini Energy Regulatory Authority (ESERA). The application is for a two-year period, 2023 and 2024 (multi-year price determination).

EEC in its application notes that if successful, the multi-year tariff approval would help them cover their costs for both the financial years being applied for. In its justification for a tariff increase, the State Owned Enterprise (SOE) observes that in February 2020 it was awarded an average tariff increase of 1.45%. However, due to the COVID-19 pandemic that led to a partial lockdown, they were requested to defer this tariff escalation.

The company notes that the current electricity prices do not cover the full costs of supplying electricity across the various tariff categories. EEC recognizes the impact of tariff increases on the economy and households, especially small businesses and low-income earners.

“In April 2021, EEC introduced an inclining block pricing scheme on the S10 Lifeline tariff with a further reduction in rate. The S10 tariff was created for low-income customers as a poverty alleviation intervention. About 245 customers are already benefitting from this tariff”

Additionally, the SOE notes that their 2020/21 audited financials show that there is an overrecovery of E168, 950,192 (Surplus). “This essentially means that the utility recovered more than what was submitted to ESERA in terms of the budget. These funds after review by ESERA will get deducted from the revenue the utility requires for funding its operations over the two-year period that the tariff request is for”

However, the following financial year the company under recovered. “We under recovered by E12, 053,238 in 2021/22. “This means that the utility recovered less than what was approved by ESERA”

EEC also discloses that during the 2021/22 financial year, the company spent 3% more than what was anticipated (E1.328bn versus E1.371bn).

“The over recovery in the 2020/21 financial year is mainly because of non-implementation of several projects as well as planned activities during the COVID-19 period. The under-recovery in 2021/22 was mainly because of lower-than-anticipated sales revenue as well as the revived implementation of major capital projects to completion. There have also been increased costs in some areas that require funding.”


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