Staff Reporter
THE Namibia Electricity Control Board (ECB) has decided to increase NamPower’s bulk tariff to 8% for the financial period 2024-2025.
This adjustment, announced by NamPower’s Managing Director, Kahenge Simson Haulofu, will take effect from 1 July 2024. Haulofu explained that the main reason for this tariff hike is the rising cost of electricity generation, especially due to higher expenses for imported electricity.
“Furthermore, the under-recovery of revenue was a result of (a) lower than projected generation from the Ruacana Hydro Power Station, which energy was replaced by imports at a higher cost than if it were generated by Ruacana; (b) the depreciation of the Namibia Dollar against the US Dollar in 2023 and; (c) forecasted inflation variances,” Haulofu added.
He elaborated that generating electricity at Ruacana is relatively inexpensive compared to other sources. Therefore, he explained, reduced generation at Ruacana leads to more costly alternatives or imports, driving up overall costs.
Haulofu revealed that starting 1 July, electricity charges from NamPower will include 15% Value Added Tax (VAT) on the total invoice, a 2.12 cents per kilowatt-hour (kWh) levy for the ECB, and a National Energy Fund (NEF) levy of 1.60 cents per kWh, applicable to all Transmission Time of Use (TOU) Tariff customers.
He pointed out that the ECB has approved a TOU Tariff, which means electricity costs vary based on time. He revealed that this tariff includes several charges: Customer Service Charge, Point of Supply Charge, Network Access Charge, Maximum Demand Charge, Energy Charges, Losses Charges, and Reliability Charge.
Haulofu explained that the Customer Service Charge is applied to all customers regardless of usage, and the Point of Supply Charge varies based on the size of supply and type of metering. Both charges, he emphasized, are payable regardless of electricity consumption.
Haulofu also highlighted that the Network Access Charge is based on the highest demand during the month and applies to all periods. He further explained that the Maximum Demand Charge applies only during peak and standard periods for energy from the transmission network.
He also explained that the Energy Charges vary by time and day, as well as supply voltage. Furthermore, he explained, the Losses Charges apply to energy consumed from NamPower and IPPs, differentiated by time and voltage, while the Reliability Charge is a flat rate for energy consumed from IPPs, not varying by time or voltage.
NamPower’s Managing Director also highlighted that the Notified Maximum Demand Penalty Charge is 100% of the Network Access Charge and Maximum Demand Charge for exceeding the contractual demand for three consecutive months. If demand falls below the contractual demand after the penalty charge, he added, it resets to zero until exceeding for three consecutive months again.