CONSUMERS will have to dig even deeper in their pockets following the Lesotho Electricity and Water Authority’s (LEWA) approval of a 3.6 percent and 4.6 percent increase in electricity and water tariffs respectively which comes into effect tomorrow.
The move is sure to increase pressure on consumers already grappling with high food and fuel prices.
As the regulator of the Lesotho Electricity Company (LEC) and Water and Sewerage Company (WASCO), LEWA approved the tariffs increases after considering the merits of their proposals and after holding public hearings.
LEC had applied for a tariff increase of 16.9 percent to cover its proposed revenue requirement of M964.48 million for the 2017/18 financial year.
Among the reasons LEC cited for the proposed hike were bulk supply costs, expenditure costs, return on assets and depreciation costs.
However, LEWA found the justification for a 16.9 percent tariff increase “inadequate” and approved a 3.6 percent increase on a revenue requirement of M856.29 million.
For its part, WASCO had applied for a tariff increase of 10 percent to cover its proposed revenue requirement of M213.19 million for the 2017/18 financial year.
Among the reasons WASCO cited for the proposed hike were to undertake preventive maintenance of its key infrastructure and maintain non-revenue water to acceptable levels.
The agency also cited its intention to take-over the Metolong dam water treatment facility and related infrastructure as well as rehabilitating its reticulation systems and improving performance.
LEWA also deemed WASCO’s justification for a 10 percent tariff increase “inadequate”.
“For WASCO’s operations to be run efficiently, the Company has been allowed a revenue requirement of M232.86 million instead of M257.3 million it had proposed. This revenue consists of 198.25 million for water and M34.61 million for sewerage services. The required revenue results in water volumetric tariff increase of 4.64 percent for water and not 10 percent, as outlined in WASCO’s application,” read part of the LEWA statement issued on Thursday.
The regulator also noted that WASCO’s performance on the quality of service standards “was found to be lacking”.
“For instance, water supply and reliability thereof must be addressed in the northern (Leribe and Butha-Buthe) and southern districts (Mafeteng and Mohale’s Hoek). Hence the utility has been allowed full recovery for financing expenses to implement various externally and internally funded projects,” said LEWA.
“There is a deterioration in quality of effluent, which can be attributed to the observed lack of proper operation and maintenance at most of WASCO’s inspected wastewater treatment facilities. Performance of the plants must be improved by proper operation and maintenance, especially the smaller centres.”
WASCO was also directed to improve its debts collection efficiency which currently takes five months.
“The best obtaining practice is that 45 days is the maximum period within which a utility must recover debts from customers. WASCO should reduce the number of days,” LEWA added.