Alweendo overrides ECB verdict on Ongos
• Minister’s decision sets cat among pigeons
The minister wants the City of Windhoek to refund Ongos for its investment, or allow it to generate its own power.
Mines minister Tom Alweendo used his ministerial powers to overrule the electricity regulator on the controversial Ongos Valley Development’s (OVD) plan to produce its own electricity.
As details emerge about the matter, it turns out the Electricity Control Board (ECB) had initially recommended that the minister decline OVD’s application to acquire a distribution-and-supply licence, which would allow it to generate and sell electricity onwards to its end users - despite the settlement being within municipal boundaries.
The ECB, in a submission to Alweendo dated 22 April 2022, made known its opposition to OVD being granted permission to operate under the City’s licence, saying it was in a position to provide electricity to all end users within municipal boundaries.
“The City is in a position to supply OVD in accordance with the project’s timelines. The City was correct in insisting that cost recovery must be done through the customer-funded model. The objective of tariff harmonisation in the City’s distribution licence area will be negatively impacted by allowing OVD to charge a different tariff to recover the costs of the distribution-and-supply infrastructure,” the recommendations read.
Unjustifiably refused
Airing his reasons for the approval, Alweendo - in a letter dated 19 August 2022 - stated that OVD had unjustifiably been refused a licence by the City.
“My view is that [the City] has unreasonably refused OVD to operate under their distribution-and-supply licence.
“I have presented [the City] the opportunity to either compensate OVD for their investment or to allow OVD to operate under [the City’s] licence. No responses were received from the [City] on these two options,” Alweendo said.
15-year mandate
Granting permission to OVD, Alweendo said it would be allowed to operate under the municipality’s distribution-and-supply licence, on condition that it operate for a period of 15 years, or until such a time that it has recouped its investment.
OVD is also required to transfer its distribution assets to the City after 15 years, or at such a time that it has recouped its investment.
The minister added that a lack of communication from the City left him with no choice but to grant OVD with a generation licence, in a letter dated 31 October 2022 to then-mayor Sade Gawanas.
“I implored the City to pronounce itself on the matter at hand on or before 2 August 2022. Failure of which would result in me granting OVD permission to operate under the licence of the [City], as provided for under Section 34 (1) of the Electricity Act.
“Unfortunately, no communication was received from the City, leaving me with very little room but to grant OVD the permission,” he said.
The ECB informed OVD of the minister’s approval, saying it would be able to utilise the City’s generation-and-supply licence, effective 1 September 2022, for a period of 15 years.
Set it aside
“The minister of mines, under section 34 of the Electricity Act, has granted permission to OVD to operate under the distribution-and-supply licence of the [municipality]. The permission has been granted for 15 years as from 1 September 2022, or until such time OVD has recouped its investment - whichever comes first,” the ECB said.
ECB CEO Robert Kahimise refused to comment, saying the matter was sub judice.
The City council has, effective 11 September, applied for Alweendo’s decision to be set aside by the court. The council is represented by Gilroy Kasper, OVD by Appolos Shimakeleni and the ECB by Fisher, Quarmby & Pfeifer, while the mines ministry is represented by government attorneys.
As details emerge about the matter, it turns out the Electricity Control Board (ECB) had initially recommended that the minister decline OVD’s application to acquire a distribution-and-supply licence, which would allow it to generate and sell electricity onwards to its end users - despite the settlement being within municipal boundaries.
The ECB, in a submission to Alweendo dated 22 April 2022, made known its opposition to OVD being granted permission to operate under the City’s licence, saying it was in a position to provide electricity to all end users within municipal boundaries.
“The City is in a position to supply OVD in accordance with the project’s timelines. The City was correct in insisting that cost recovery must be done through the customer-funded model. The objective of tariff harmonisation in the City’s distribution licence area will be negatively impacted by allowing OVD to charge a different tariff to recover the costs of the distribution-and-supply infrastructure,” the recommendations read.
Unjustifiably refused
Airing his reasons for the approval, Alweendo - in a letter dated 19 August 2022 - stated that OVD had unjustifiably been refused a licence by the City.
“My view is that [the City] has unreasonably refused OVD to operate under their distribution-and-supply licence.
“I have presented [the City] the opportunity to either compensate OVD for their investment or to allow OVD to operate under [the City’s] licence. No responses were received from the [City] on these two options,” Alweendo said.
15-year mandate
Granting permission to OVD, Alweendo said it would be allowed to operate under the municipality’s distribution-and-supply licence, on condition that it operate for a period of 15 years, or until such a time that it has recouped its investment.
OVD is also required to transfer its distribution assets to the City after 15 years, or at such a time that it has recouped its investment.
The minister added that a lack of communication from the City left him with no choice but to grant OVD with a generation licence, in a letter dated 31 October 2022 to then-mayor Sade Gawanas.
“I implored the City to pronounce itself on the matter at hand on or before 2 August 2022. Failure of which would result in me granting OVD permission to operate under the licence of the [City], as provided for under Section 34 (1) of the Electricity Act.
“Unfortunately, no communication was received from the City, leaving me with very little room but to grant OVD the permission,” he said.
The ECB informed OVD of the minister’s approval, saying it would be able to utilise the City’s generation-and-supply licence, effective 1 September 2022, for a period of 15 years.
Set it aside
“The minister of mines, under section 34 of the Electricity Act, has granted permission to OVD to operate under the distribution-and-supply licence of the [municipality]. The permission has been granted for 15 years as from 1 September 2022, or until such time OVD has recouped its investment - whichever comes first,” the ECB said.
ECB CEO Robert Kahimise refused to comment, saying the matter was sub judice.
The City council has, effective 11 September, applied for Alweendo’s decision to be set aside by the court. The council is represented by Gilroy Kasper, OVD by Appolos Shimakeleni and the ECB by Fisher, Quarmby & Pfeifer, while the mines ministry is represented by government attorneys.
Comments
Namibian Sun
No comments have been left on this article