ECB shoots down Nored, Windhoek tariff hike bids
Electricity distributors warned against non-compliance
Nored failed to submit audited financial statements for the 2022 financial year, while the City did not adequately explain how it would ring-fence its electricity department.
Nored and the City of Windhoek have failed in their efforts to secure tariff hikes from energy regulator, the Electricity Control Board (ECB).
This follows non-compliance to regulatory directives the ECB issued to Nored and the City respectively. The announcement was made by ECB technical manager, Petrus Johannes.
In the case of Nored, it failed to submit audited financial statements for the 2022 financial year, while the City did not adequately explain how it would ring-fence its electricity department.
“Notwithstanding the exception just described, the ECB wishes to commend the above-mentioned distribution utilities for complying with its regulatory directive to submit their tariff applications on time. As we cautioned during the last tariff review period, all distribution utilities ought to apply for their annual tariff reviews immediately after the announcement of the NamPower bulk electricity tariff,” Johannes said.
Non-compliance to hamper financial performance
Non-compliance on the part of the regional electricity distributors (REDs) could lead to them not being able to recover costs, Johannes warned, a situation the ECB would like to avoid.
“This is so because utilities that do not apply for tariff adjustments in time to coincide with the implementation of the bulk tariffs, which is effective 1 July, stand to lose revenue because they will be selling electricity based on outdated tariffs while purchasing on new tariffs, especially pre-paid revenue that is collected through pre-paid sales,” he said.
Petrus warned that non-compliance stood to hamper the financial performance of REDs.
“As a regulator, we discourage the above practice by distribution utilities because it is not financially sustainable, affects their financial ability to honour NamPower’s bills and it further affects service delivery. Therefore, we direct all licencees who are in the habit of submitting their tariff applications late to immediately comply and submit their reviews. However, going forward, non-compliance with regulatory directives shall not be tolerated,” he said.
The City of Windhoek and Nored would be granted a 6.6% and a 7.9% tariff hike respectively once their compliance matters had been addressed. Meanwhile, a 6% tariff hike was approved for NamPower, Oshakati Premier Electric and Cenored, 6.6% for ErongoRed, 6.4% for the Keetmanshoop Electricity Business Unit, and 6.4% for the Rehoboth Town Council.
This follows non-compliance to regulatory directives the ECB issued to Nored and the City respectively. The announcement was made by ECB technical manager, Petrus Johannes.
In the case of Nored, it failed to submit audited financial statements for the 2022 financial year, while the City did not adequately explain how it would ring-fence its electricity department.
“Notwithstanding the exception just described, the ECB wishes to commend the above-mentioned distribution utilities for complying with its regulatory directive to submit their tariff applications on time. As we cautioned during the last tariff review period, all distribution utilities ought to apply for their annual tariff reviews immediately after the announcement of the NamPower bulk electricity tariff,” Johannes said.
Non-compliance to hamper financial performance
Non-compliance on the part of the regional electricity distributors (REDs) could lead to them not being able to recover costs, Johannes warned, a situation the ECB would like to avoid.
“This is so because utilities that do not apply for tariff adjustments in time to coincide with the implementation of the bulk tariffs, which is effective 1 July, stand to lose revenue because they will be selling electricity based on outdated tariffs while purchasing on new tariffs, especially pre-paid revenue that is collected through pre-paid sales,” he said.
Petrus warned that non-compliance stood to hamper the financial performance of REDs.
“As a regulator, we discourage the above practice by distribution utilities because it is not financially sustainable, affects their financial ability to honour NamPower’s bills and it further affects service delivery. Therefore, we direct all licencees who are in the habit of submitting their tariff applications late to immediately comply and submit their reviews. However, going forward, non-compliance with regulatory directives shall not be tolerated,” he said.
The City of Windhoek and Nored would be granted a 6.6% and a 7.9% tariff hike respectively once their compliance matters had been addressed. Meanwhile, a 6% tariff hike was approved for NamPower, Oshakati Premier Electric and Cenored, 6.6% for ErongoRed, 6.4% for the Keetmanshoop Electricity Business Unit, and 6.4% for the Rehoboth Town Council.
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