NORED proposes to increase tariff by 7.7 percent

By Risco Lumamezi

THE Northern Regional Electricity Distributor (NORED) is set to increase its electricity tariff for 2024/2025 financial year on July 1.

Mr. Elifas Valombola , Acting Chief Financial Officer of NORED explained to the Zambezi stakeholders during its first-ever National Consultative Presentations that kicked-off in Zambezi on Tuesday, that  NORED  has proposed an increase of 7.7 percent.

According to Mr. Valombola the average tariffs take total revenue divided into total KWh units  sold  for  category, and the average is driven by the tariff as well as  the capacity utilisation of the customer, while high average  tariff could be high tariff and low-capacity utilisation of customer.

In its Tariff application submitted to the Electricity Control Board (ECB),  a regulatory body for electricity in Namibia  showed that in  the 2024/ 2025 Financial Year, NORED has proposed that the tariff increase will be charged according to the following categories:

He said that what NORED is applying for is lesser than the projected cost and is also lesser than NAMPOWER Tariff increase of 8 percent.

Mr. Valombola  clarified  that on the new proposed tariff increase of N$2.77, N$0.60 is paid  to the regional and local authority councils respectively.

Speaking at the same occasion NORED Acting Chief Executive Officer , Mr. Toivo Shovaleka  responded to the questions raised by the participants that the 7.7 % tariff increase is a result caused by the bulk power supplier, NAMPOWER  which increased its tariffs by 8 percent.

“ Every increase will cause an impact , we now  note that the national utility has got 8% increase… to have  a zero percent , we could not make business sense, we could not be able to sustain our operations  because  we would now buy at extra cost because  of that increase , if we don’t adjust our tariff we will be obviously not  be able  to serve our  business community” quashed Mr. Shovaleka.

NORED Acting CEO added that it is unfortunate that there is an increase of 8 percent by the giant power utility supplier (NAMPOWER ). “Now  we are able  to apply  for an average  increase of 7.7 % we are not even matching the average increase of national utility that’s why  we are here to try impress upon you as our consumers , to say that indeed we need an increase as well although we are not matching the one where we are going to buy from , we still think that  7.7 will be reasonable for us to continue with our business and be able to serve”

Mr. Pinehas Mutota , Executive of Economic and Market Regulation at ECB told the attendees that the purpose of the consultative meeting was to give NORED an opportunity to publicly engage its customers as a requirement of its application process to be scrutinised and considered by ECB in Windhoek.

“ The purpose of this meeting today  , after having looked at these increases what are your  views and what  can NORED consider perhaps not necessarily. But is for us  to take  note of   your  concerns  and not  only concerns but  also additions  as how we are going  to make        this increase much better for  everybody so that we take those notes so when the ECB board will review, will say Zambezi in Katima Mulilo they are some of the recommendations they have made”

The presentations were moderated by Mr. Ferdinand Molale , Public Relations Officer of ECB, and it was further announced that the consultative meetings for the Tariff Application of Regional Distributors will be now conducted every year across all regions of Namibia.