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BPC bemoans non-cost reflective tariffs

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BPC bemoans non-cost reflective tariffs

A report compiled by the Regional Energy Regulators Association (RERA) of Southern Africa shows that Botswana Power Corporation (BPC)’s electricity charges are among the lowest in the region.

The report buttresses sentiments previously expressed by BPC Acting Chief Executive Officer (CEO) Edward Rugoyi, who explained that BPC’s precarious financial position is caused by non-cost reflective tariffs, low availability of Morupule B, and escalating costs of imported power.

“It is important for BPC to migrate towards cost-reflective tariffs because the government’s tariff subsidy has been gradually decreasing over the years,” said Rugoyi.

The RERA report shows that Botswana charges US cents 9.436/kWh, Eswatini 13.720 cents/kWh, Mauritius 16.810 cents/kWh and Namibia 15.998 cents/kWh.

However, Botswana charges slightly more than Lesotho, Zambia and Zimbabwe.

The report also identifies Eswatini, Mauritius and Namibia as the only three countries in the region whose tariffs are cost-reflective.

SADC countries have previously agreed that it was important for their power utilities to charge cost-reflective tariffs as that would ensure their profitability and sustainability.

BPC services over 492 000 customers throughout the country, mostly domestic households, government departments and commercial enterprises.

The Corporation’s customer base increases by five percent every year, buoyed by its village electrification projects.

Rugoyi has explained that BPC needs adequate finances to meet escalating customer demand and ensure the reliability of supply, which can only be attained through cost-reflective tariffs.

“Cost reflective tariffs are important in ensuring the long term viability of the energy sector,” said Rugoyi.

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