ESERA approves 10.14% electricity tariff hike for EEC

By Ntombi Mhlongo and Phephile Motau 
 
The Eswatini Energy Regulatory Authority (ESERA) has approved an average tariff increase of 10.14 per cent for 2023/24 and an average tariff increase of 8.02 per cent for 2024/25.

The domestic tariff will increase by 10.98 per cent whilst energy charges for Time-of-Use customers are set to increase by 10.80 per cent and Small Commercial will increase by 10.90 per cent. 

Demand charges will increase by 10.80 per cent whilst Time of use Facility charges and access charges should increase by the approved inflation of 4.56 per cent. 

On the other hand, Small Commercial facility charges will decrease by 4.54 per cent. Each adjustment will be implemented with effect from April 1 each year.

Making his remarks at a press conference held at Mountain View, ESERA Chief Executive Officer Sikhumbuzo Tsabedze recounted that the Eswatini Electricity Company requested a revenue requirement of E2.93 Billion for 2023/24 and E3.44 Billion for 2024/25, translating to an average tariff increase of 21.3 per cent for each of the years under consideration. 

EEC proposed to spread the tariff adjustment across the different customer categories and revenue streams as follows; 25.99 per cent increase proposal for domestic customers, 18 per cent non-time of use business customers energy charge, 20.22 per cent for Time of Use business customers energy charge and demand charge and 4.52 per cent for facility and access charges. 

The CEO said having duly considered the tariff application, taking into consideration the written and oral submissions from stakeholders as well as facts and evidence provided by EEC, the ESERA then made a decision.

Part of the decision is to the effect that EEC is allowed a revenue of E2.61 Billion against the E2.93 Billion they had requested for the financial year 2023/24 and a revenue of E2.93 Billion be allowed, against E3.44 Billion that EEC had requested for the financial year 2024/25.

“The revenue Requirement excludes the VAT on Imports as per the ruling of the Eswatini Revenue Service (ERS) which states that the EEC will claim input tax credits on all imports,” the CEO said when unpacking the decision.

He explained that in coming up with the decision to adjust the current tariff levels, certain parameters were considered and these include a rate of return of 8.26 per cent for EEC to meet the cost of raising capital and a projected tariff increase of 18.65 per cent and 12.74 per cent from Eskom for the years 2023/24 and 2024/25 respectively plus various inputs and submissions received from electricity stakeholders.