NamPower defends electricity tariffs

NAMPOWER has slammed reports that it was making “huge profits” at the expense of consumers.In fact, the power utility says the price of electricity in Namibia is below what it costs to provide it and that it is among the cheapest electricity suppliers in the world.

In response to reported claims made by DTA MP Johan de Waal, at a parliamentary hearing on the energy sector last week that the cost of electricity had been hiked by 27 per cent, NamPower said that this was not the case and that its tariffs were in line with that permitted by the Electricity Control Board (ECB). “NamPower is in fact subsidising electricity prices in the country and is clearly not making huge profits at the expense of the consumers,” said a statement issued by the company.Upon enquiry from The Namibian yesterday, De Waal said he had not said that electricity had been increased by 27 per cent, but asked whether electricity would in future be increased by this amount or even more, given the supply shortage in the region.De Waal said he had noted from NamPower’s financial statements for 2003 that the company had not paid tax, had received a refund from the Receiver of Revenue and still made a profit.”I just found it quite strange that they still have to put up the prices,” he told The Namibian.NamPower raised its bulk electricity price to transmission customers (farmers and mines who buy electricity directly from NamPower) by 6,2 per cent and to distribution customers (local authorities and regional electricity distributors) by 9,5 per cent on July 1.”NamPower wishes to state that the increases of electricity prices by local authorities, municipalities and Nored are outside its jurisdiction and it can therefore not be held accountable for that,” the company said.NamPower said from Government’s White Paper on Energy it was clear that electricity tariffs should be cost reflective – that means that the operational expenditure should match operational income.The company said it had been shouldering the costs when it was forced to resort to more expensive electricity supply such as operating the Van Eck and Paratus power stations.NamPower said it would continue to be guided by the ECB in determining the price of electricity, despite the challenge of having to find new power sources because the demand was exceeding the supply in the region.Earlier this month, the ECB said the power crunch facing the region could mean that Namibia would end up paying between 60 and 100 per cent more for power in the next two years.”NamPower is in fact subsidising electricity prices in the country and is clearly not making huge profits at the expense of the consumers,” said a statement issued by the company.Upon enquiry from The Namibian yesterday, De Waal said he had not said that electricity had been increased by 27 per cent, but asked whether electricity would in future be increased by this amount or even more, given the supply shortage in the region.De Waal said he had noted from NamPower’s financial statements for 2003 that the company had not paid tax, had received a refund from the Receiver of Revenue and still made a profit.”I just found it quite strange that they still have to put up the prices,” he told The Namibian.NamPower raised its bulk electricity price to transmission customers (farmers and mines who buy electricity directly from NamPower) by 6,2 per cent and to distribution customers (local authorities and regional electricity distributors) by 9,5 per cent on July 1.”NamPower wishes to state that the increases of electricity prices by local authorities, municipalities and Nored are outside its jurisdiction and it can therefore not be held accountable for that,” the company said.NamPower said from Government’s White Paper on Energy it was clear that electricity tariffs should be cost reflective – that means that the operational expenditure should match operational income.The company said it had been shouldering the costs when it was forced to resort to more expensive electricity supply such as operating the Van Eck and Paratus power stations.NamPower said it would continue to be guided by the ECB in determining the price of electricity, despite the challenge of having to find new power sources because the demand was exceeding the supply in the region.Earlier this month, the ECB said the power crunch facing the region could mean that Namibia would end up paying between 60 and 100 per cent more for power in the next two years.