Rédaction Africa Links 24 with Lesotho Times
Published on 2024-03-26 13:52:47
Electricity tariffs in Lesotho have recently been increased by nearly 10 percent, adding to the financial burden of already struggling consumers. The Lesotho Electricity and Water Authority (LEWA) announced the tariff hike, which became effective on April 1, 2024. The increase includes a 9.6286 percent adjustment in both the energy and maximum demand tariff, as well as a 5.0 percent raise in the lifeline tariff.
The energy and maximum demand tariff mainly affects consumers who use a larger amount of power, particularly in the commercial sector, while the lifeline tariff is primarily for domestic users. The Lesotho Electricity Company (LEC) had initially requested a 23 percent adjustment for the maximum demand category and a 15 percent increase for the lifeline category for the financial years 2023/24, 2024/25, and 2025/26 but only received approval for a smaller hike.
The decision to approve the lower increase was influenced by the LEC’s non-compliance with regulatory requirements, such as delayed submission of reports. The LEC’s failure to meet these requirements led to a rejection of its initial proposal for a higher tariff adjustment.
During a media briefing in Maseru, LEWA board member Tṧolo Letete explained that the Authority assessed LEC’s Multi-Year Tariff Application for the period 2023/24-2025/26 and considered various factors before reaching a decision. The revenue requirements proposed by LEC were adjusted by the Authority to ensure a balance between the sustainability of the LEC and the affordability of electricity services for customers.
Despite the request for an increase in electricity tariffs, the LEC’s application to charge cost-reflective connection fees was deferred for further review by the government. This decision was made after considering public consultations and stakeholder input, which suggested that the tariff increase should be within a specific range.
LEWA observed several shortcomings in the LEC’s operations, including a decline in data quality and a lack of timely reporting. The company’s financial statements also received an adverse audit opinion for the Financial Year 2021/22. Despite these challenges, the LEC cited financial difficulties due to depleted funds as a reason for requesting tariff adjustments.
The increase in electricity tariffs is expected to further strain consumers in an environment characterized by low wages and high unemployment rates. The impact of the hike on the general population remains a concern, as households and businesses struggle to cope with rising costs. The decision to raise tariffs reflects a delicate balance between ensuring the financial viability of the LEC and safeguarding the interests of the public.
Read the original article on Lesotho Times
