Wednesday, July 17, 2024

Questions over BERA’s independence

The Minister of Minerals and Energy Lefoko Moagi’s statement in parliament last week raised questions about Botswana Energy Regulatory Authority (BERA)’s regulatory neutrality.

This was after the minister stopped short of forejdging BERA’s decision on an application by Botswana Power Corporation (BPC) to increase electricity tariffs for the financial year 2023/24.

Both BPC and BERA fall under Minister Moagi’s ministry.

BPC has asked BERA to approve a 5% electricity tariff increase across all customer categories. The power utility says it “undertook an assessment of the required revenue for the financial year 2024 in line with BERA prescribed methodology which translated into Page 10 |11 P6.297 billion (20% tariff increase). However, the Corporation’s tariff application is only an upward adjustment of 5% to attain the Total Operating Income of P5.370 billion inclusive of P300 million consumer tariff subsidy from the Government of Botswana to cushion the consumers against steep and sudden tariff increase.”

At the time of going to press, BERA had not made a decision on BPC’s request, Minister Moagi however suggested that BERA was likely to approve the tariff hike request.

“Currently, the electricity tariffs charged by Botswana Power Corporation are below the cost per unit of supplying electricity to customers.

“This being the case, the tariffs are likely to steadily, and progressively increase until they reach cost recovery levels. In a bid to attain cost-reflective tariffs, the Corporation has applied to the Botswana Energy Regulatory Authority (BERA) to consider a tariff increase,” Moagi told Parliament.

The Minister was answering a question by Ghanzi North Member of Parliament (MP) John Thiite.  The  principal objective in delegating powers to an independent regulator is to ensurethat important decisions are not swayed by short term political pressure.

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