BPC punishing customers for its operational losses
Leader of Opposition, Dithapelo Keorapetse says in the last five years, electricity tariffs have been increased by 35 percent, which is very steep for people who are paid slave wages and majority of whom are unemployed at nearly 32 percent.
Exacerbating the situation is hidden costs in tariffs in the form of VAT, Government Levy and Vendor Charges, Keorapetse said, lobbying therefore, for the removal of VAT and the levy from power costs for domestic use.
Keorapetse was responding to a statement by Minister of Minerals and Energy Lefoko Moagi, who stated that since 2018/19 to the current financial year 2023/24, electricity tariffs were increased three times, in April 2018, April 2020 and April 2021.
According to Maogi, connection fees did not increase for all customers who fall within the National Electrification Standard Cost (NESC) during the financial years. He stated that government introduced free electricity connections for households with effect from 1st April 2024.
Keorapetse, who is also MP for Selibe-Phikwe West argued that the average energy availability factor over the period is also low from around 30 percent to plus 60 percent over the five-year period.
“International benchmark is to Energy Available Factor (EAF) to be at least 85 percent, which means a power plant should be able to generate at least 85 percent of its design generate capacity. Energy Availability Factor is an important measure of technical performance.
“It has an impact on sale revenue, and if not careful, BPC can and indeed it is passing operational loses to the customers through increased tariffs. This is wrong. So, before they increase tariffs the government has to ensure that they operate efficiently," Keorapetse stated.
He told Botswana Guardian that it is unclear what processes are in place to ensure that customers are protected from paying operational efficiency loses. The situation, he said, is not helped by having government as a utility provider and regulator, “so tariff hikes are not properly interrogated and there is no intention to change this situation.”
“The issue of National Electricity Standard Connection charge (NESC) which is currently at P5 000 for households that are less than 500m from the connection point. In some cases, those within the NESC distance can’t be connected merely because the certificate is written farm.
“Such Batswana have built houses in their masimo. But elsewhere NESC is applied because they have what they call mokgoro in the farm, which are basically households. The question is why apply NESC at some part of the country and not some other parts? Lastly, the NESC policy is silent on the issue of what a household is. Can one have a household in the farm?”
Keorapetse has argued that maximum power demand billing system is also bad for domestic and foreign investment especially manufacturing sector. It makes the cost of production very high. It must be reviewed for these sectors, he said, adding that it would collapse textile industry in Phikwe for instance.