Government and the Electricity Control Board (ECB) have completed a research focusing on a Support Tariff Mechanism (STM) which will see the poor and low consuming electricity users using power at subsidised rates.
This was revealed by the Acting Chief Executive Officer of ECB, Rojas Manyame at a press gathering last week where the regulatory board also approved a 13.22% increase on bulk supply tariff for NamPower.
Manyame added that the regulator and the Ministry of Mines had commissioned a research that is to be launched at the end of this month focusing on ways of averting exorbitant power charges to those in the lower end of society who do not consume much power.
According to Manyame the STM will see certain people in the lower end of society who consume a certain number of units (to be announced) paying a highly subsidised electricity tariff charge.
“We have done research to ascertain what can be done to assist those in the lower end of society to pay their electricity bill. Obviously it was going to be difficult to judge individuals economic status depending on their remuneration so we decided to focus on the number of units consumed per month. A family that does not have many household goods will not pay much but the moment they exceed the certain limit then they will be moved to the high tariff bracket,” Manyame said.
The structure of the STM, Manyame revealed is aligned in a way that will see those in the high consuming power bracket subsidising the portion of the population that is in the lower end of society and that also consumes low power.
He added that ECB and Government decided to have a cross subsidy mechanism in place because the state could not be in a position to sustain the heavy burden of paying for those who will paying low tariffs.
Tariff increases in the country have been on upward trend since 2011 when cabinet endorsed a bid to make NamPower charges cost reflective. The move was taken to allow the power utility to sustain its operations and also sustain power imports from Zimbabwe and South Africa where they get between 50% and 70% power depending on the season.
Namibia is also expected to continue increasing power tariffs until 2019 when the multibillion dollar Kudu Gas plant kicks in. Research has shown that Kudu has potential to change the fortunes for Namibia from a net importer of power to an exporter and also make the commodity affordable for the cross section of the population.