Erongo RED announces tariff adjustment

Support provided for vulnerable individuals
Consumers will have to dig deeper into their pockets to foot their electricity bill.
Leandrea Mouers
Erongo RED announced a 6.9% tariff adjustment on electricity effective 1 August 2022.

Immanuel !Hanabeb, the chief executive officer of Erongo RED explained that the company was informed in June that electricity tariffs as approved by the Electricity Control Board (ECB) would increase by 7.3%, effective from 01 July 2022. “The actual impact on Erongo RED is 9.4%.In June, Erongo RED submitted an application to the Electricity Control Board (ECB) for a tariff adjustment increase for the 2022/2023 financial year, which was approved a weighted average of 6.9% tariff adjustment effective 01 August 2022. The detailed tariff schedule will be placed in various newspapers, on our website as well as in the tariff booklets which can be obtained from our offices.”

!Hanabeb said that although the approved weighted tariff is 6.9%, the impact on customers will vary depending on individual consumer consumption patterns and type of connection. “These tariff increases are not unique to the electricity industry only. Almost everything (from basic commodities to material costs) has gone up in the past few months. The dynamics mainly drive this in geopolitical issues (Ukraine and Russia) which have significantly impacted the global economy and trade. In addition, the decline in value of our currency against the dominant currencies such as the US dollar and Euro is also another contributing factor. However, the main factor that influences our tariffs, is the bulk tariff increase by NamPower. All these factors have an impact on the input cost to bring electricity to the end-user.”

According to !Hanabeb the company had resolved to maintain measures to assist the vulnerable members of the community amidst this increase. “We are continuing to support the pensioners. Pensioners will continue to enjoy subsidized tariffs up to 40-ampere circuit breakers and installation of the prepaid box is free for pensioners. We are also continuing with the social tariff, where consumers on the 20 amperes will be charged on the inclining block tariff structure. Erongo RED will only subsidize the first 400 units for consumers in this category. The subsidized units have been reduced from 500 to 400.”

The regional electricity distributor also decided to pass a 0% tariff increase to the customers on the Pre-Paid Business (SMEs) for the current financial period. “The fixed charges for the Farmers in the Ex-NamPower areas namely the first connection, and additional connection for the farms and plots have been reduced by 50%. As we have taken note of the concerns of the Farmers into consideration during the review. We have also decided to continue with the free pre-paid meter project for pensioners and customers who are on debt management only. We have also extended the debt management program to allow customers who are disconnected to be reconnected through a debt management arrangement. This is subject to terms and conditions.”

!Hanabeb said that through the Net Metering Rules promulgated by the Electricity Control Board (ECB) in 2016, customers will still be allowed to install solar rooftops on their premises to generate energy for self-consumption. “The surplus energy can be fed into Erongo RED’s network and earn Net Metering Credits in return. Erongo RED uses the net metering credits earned by the customers to offset part of their electricity bill.”

He urged the pensioners to re-register for them to continue benefiting from the subsidized tariffs. “The purpose of the re-registration is to mitigate the risk of misuse of the scheme by those who are not supposed to be on the pensioner tariff.”

!Hanabeb emphasised that the company had considered all possible ways to ensure that the least and most reasonable tariff adjustments are passed on to customers, whilst ensuring the sustainability of the company.

“As part of our efforts to cushion the impact on the consumers, we intend to reduce our expenditures as well as put some of our projects on hold. We have been busy reviewing and crafting strategies to find solutions on how best we can bring services to customers at a reasonable price. Some of these strategies include: diversifying our energy mix by exploring cheaper alternative energy sources either through self-generation or partnership with Independent Power Producers, ensuring the least cost of electricity through the Modified Single Buyer Model (MSBM), implementing prudent costs savings interventions, developing and promote strategic business partnerships, pursue a focused business development drive, ensure completeness of revenue, generate a healthy cash flow through targeted credit control and debt management interventions, reduce technical and non-technical electricity losses, develop and implement a financing strategy as well as diversify our revenue streams.”

The CEO said that detailed strategies and plans will be shared in the coming weeks. “The ultimate objective of all these interventions is to ensure the sustainability of the business but also to ensure that we manage and pass the least electricity prices to our consumers.”

He also called on the community to play its part in reducing their electricity bills. “Just applying basic electricity-saving tips such as turning off unused lights and appliances, adjusting your geyser thermostat and use of energy-efficient appliances can make a huge difference on the bill.”