Energy Ministry pushes for new tariff structure
The Energy Ministry is pushing for a new tariff structure that will ensure that both domestic and industry consumers pay the same price for power consumed.
The move is part of efforts to deal with the imbalances in the sector.
Speaking on the move, the Deputy Minister for Energy, Andrew Egyapa Mercer, indicated that the price for a litre of fuel at the pump station is the same regardless of the car the consumer uses so it should be the same way in the case of electricity that regardless of how much unit consumed, you get to pay per unit of electricity.
“If you go to the fuel station, regardless of whether you drive a tiko or a land cruiser, the price for a litre of fuel is the same. So why can’t we implement that in the electricity tariff structure, so that regardless of how much unit of electricity you consume, you pay per unit of electricity”, he said.
The Deputy Minister also added that the initiative will immediately change the dynamics for high electricity consumers.
He also noted that the country has excess power and needs people to consume, and so there is the need to create an environment to enable more consumption.
He continued that the high tariff structure was due to the shortage in the distribution space in the past.
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“In the event where you have excess of power where you need people to consume and so why don’t you create an environment that enables people to consume more electricity. I guess that in the past because of the shortage in the distribution space, the rationale was to discourage consumption of electricity and so the tariff structure was made such that it punishes the high consumers of electricity as opposed to the low consumers”, he added.
He again noted that, the Public Utilities Regulatory Commission (PURC) is going through the tariff review regime and so when the recommendations are ready, they will table it.
Meanwhile, Energy experts are encouraging the PURC to factor the cost of excess capacity accrued to the energy sector into the computation of power tariffs.
This, according to them, would help ease the burden of government in off-setting the about $7.5 billion energy sector debt.
Based on projections made under the Energy Sector Recovery Programme, it was expected that annual sector debt would grow by US$2.7 billion with accrued debt reaching $12.6 billion by 2023 largely due to the Pay or Take agreement for excess capacity generated and agreements to procure more gas.
The implementation of the Energy Sector Recovery Programme which was initiated in 2019 has however helped reduce the debt by $5.1 billion and also reduced the annual sector debt rate to $1 billion.
