A Review of the Nigerian Energy Industry

Tanzania: Tanesco urged to put house in order before raising tariff

power transmission station23 November 2013, Dar es Salaam – Tariff review appeal by the Tanzania Electric Supply Company (TANESCO) drew the attention of both small and large scale power consumers who demanded equally reliable services, should the request be granted by the Energy and Water Regulatory Authority (EWURA).

Sharing views at the public hearing session in Dar es Salaam, the participants spoke strongly against the alleged rampant cheating in power consumption and requested Tanesco to apprehend all dishonest electrical technicians hired to make illegal connections.

The practice causes massive loss in revenue. Mohamed Keisy (MP – North Nkasi, CCM) challenged Tanesco to seriously address the challenge of loss of power by consumers who collaborate with the company’s dishonest technicians to tamper with power metres.

“It is time ambiguous contracts are equally reviewed and purchase of new powerful power generators must be closely monitored. Electric poles must be readily available and all eligible users must foot power bills,” Keisy explained.

Deodatus Balile advised the government to enact stringent laws which would give no option of either penalty or imprisonment of those convicted of illegal power connections.

“A specified jail sentence, say five years of imprisonment must be clearly stipulated in the law. The penalty imposed is nothing compared with the loss incurred by Tanesco,” Balile suggested.

As for public firms which are not willing to clear outstanding power bills, the stakeholders advised the government to effect deductions through treasury allocations to help Tanesco execute its duties to the convenience of consumers.

The chief guest to the forum, Raymond Mushi, DC of Ilala who represented the Dar es Salaam Regional Commissioner, said the consensus on the matter at hand should focus on win-win situation for the economic well-being of the nation.

The Acting Managing Director of Tanesco, Felchesmi Mramba said, due to various reasons such as dilapidated infrastructure, prolonged drought and other factors that hiked costs of power production and distribution, the company recorded loss of 43.43bn/- in 2011 and increased to 178.45bn/- last year.

“We (Tanesco) request EWURA to approve increase of tariff from the current 197.81 per unit to the average of 332.06 per unit to help withstand escalating operational costs. The proposed 67.87 per cent average increase therefore, will bridge the gap between the revenue requirement and the actual cost.

Clarifying on recorded achievements in the last 22 months, Mr Mramba said the number of customers connected to power supply increased from 88,998 last year to 125,000 by October 2013 and the projections are 150,000 customers come 2015.

“The company reduced connection costs by 30 per cent for urban consumers and by 62 per cent for rural customers at the rate of 385,682/- in 2012 down to 272,000/- and 150,000/- for those not needing electric poles. In collaboration with the Rural Electrification Authority (REA), all district headquarters have been connected to power with the exception of 16 newly inaugurated districts,” Mramba explained.

However, according to the proposed tariffs, domestic power users not using more than 50 units a month have nothing to worry about at least for the moment, because currently they pay 60/- per unit and would be required to pay 65/- next January and 70/- come January 2015.

As for Tariff One (T1) currently paying the basic charge of 3,841/- was proposed to pay 6,506/- next January (2014) and 6,613/- per unit twelve months later. Tariff Two category (T2) currently paying the Basic Charge 14,233/- at the moment, would be required to pay 30,549/- by January 2014 and 31,507/- in January 2015.

Speaking on behalf of the National Development Corporation (NDC), the Director of Research, Planning and Industrialists Development, Mr Godwill Wanga said NDC was quite aware that Tanesco was operating at a loss in the sense that the expenses incurred do not match the current revenue, therefore unable to meet its obligations.

“Tanesco proposed the new tariff adjustment to start effective from 1st October 2013 for the 67.87 per cent , 12.74 per cent effective from January 2014 and 9.17 per cent from January 2015. If the Tariff Review Application is approved, Tanesco has promised to solve its problems, improve the general performance of the energy sector and create a conducive investment environment in the country,” Wanga said.

“The National Development Vision 2025 conceived in 1999 will only be realised after improvement of the energy sector, which is considered as the engine for the economic growth. No country could be industrialised without having a reliable power supply.

In pursuit of the above, NDC supports the proposed new tariff adjustment, but to be implemented in a yearly phased approach for three years,” Wanga said. The Chief Executive Officer of Symbion Power Company, Peter Gathercole said Tanesco’s bid was relevant to help improve services and operation of industries, as well as domestic users who might be using pricey power generators.

He sounded optimistic about the country’s brighter future with the potential to exploit various opportunities to produce electricity.

– Tanzania Daily News

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