MASERU – Water and electricity tariffs are set to increase by 5.19 percent and 4 percent respectively following approval by the Lesotho Electricity and Water Authority (LEWA) board on Thursday this week.
When announcing the approved increment, the chairperson of the board Mr Relebohile Mosito said the volumetric water tariff will be increased with effect from August 1 this year.
“There will be zero percent increase for sewerage services tariffs while the standing charge will be increased by 5.2 percent for all consumers categories except for Band A,” he explained.
The board also approved energy charges (excluding levies) and maximum demand charges to 4 percent for all customer categories, as opposed to 22 percent requested by the Lesotho Electricity Company (LEC).
Mosito said explained that as in the 20017/2018 financial year, the standing charge for Band A, which is domestic customer category consuming between zero to 5,000 litres per month, is still abolished.
He said Water and Sewerage Company (WASCO) was allowed a revenue requirement of M233.64 million for water production and distribution business as opposed to M240.57 million that was proposed by the company adding that sewerage revenue requirement is allowed at M34.61 million as opposed to M46.11 million proposed by WASCO.
“Other charges such as connection fees remain unchanged”, he added.
He said based on the facts and evidence presented to the Authority by both the company and the public, they found the justification for WASCO’s application as submitted inadequate therefore they took into consideration that for the company to finance its proposed budget of M240.57 million for water, water volumetric tariffs should increase by 8.95 percent while the standing charge would be increased by 5.2 percent.
Additionally, he said, sewerage tariffs needed to increase by 33.2 percent in order to generate the required sewerage revenue of M46.11 million as proposed by the company.
He said WASCO had to devote its efforts to reducing non-revenue water from the current level of above 40 percent to at least below 30 percent arguing this would assist the utility in reducing its production costs and to realise increased sales.
According to Mosito the effluent quality remain below acceptable set standards and this necessitates increased investment in wastewater treatment facilities, especially in the other districts other than Maseru. He said access to sewerage services was below 10 percent and effective strategies are needed to connect more customers to the already existing sewerage infrastructure in Maseru.
WASCO has also been advised to focus on improving its water and effluent quality, increasing its operation and maintenance coverage by billing and reducing its staff costs as a percentage of operation and maintenance costs to below 40 percent.
On electricity, Mosito explained that the current charges for connection, wiring testing, wiring re-testing, survey, re-survey, licensing for wiring, meter testing and house extension remain unchanged.
He said LEC was allowed a revenue requirement of M918.85 million as opposed to M1.03 billion requested by the company for the financial year 2018/2019.
When justifying the decision of the board Mosito said, among others, that LEC’s operating expenses have been maintained at the levels approved by the Authority, therefore the company is adhering to the principle approved by the Authority in adjusting its operating expenses.
He added that LEC’s proposed return on its investment of M117.60 million is not justified as the company has been declaring dividends and has unilaterally used the proceeds to increase staff remuneration.