REVIEW OF ESCOM TARIFFS UNDER THE AUTOMATIC TARIFF ADJUSTMENT FORMULA (ATAF)

BACKGROUND

The Malawi Energy Regulatory Authority (MERA) considered a review of the ESCOM’s electricity tariff under the Automatic Tariff Adjustment Formula (ATAF).

 

TRENDS IN INFLATION AND EXCHANGE RATES AND THE IMPACT ON ELECTRICITY TARIFFS

MERA noted that as at October, 2018, the last time electricity tariffs were revised following the implementation of the third base tariff for the period 2018 to 2022, the exchange rate was at MK735.50/US$ while inflation was at 9.3%. Since then, the economic fundamentals have remained relatively stable with the Kwacha depreciated to MK742.03/US$, while inflation marginally decreased to 7.9% as noted in December 2018.

Applying the same to the automatic tariff adjustment formula (ATAF), results into a -2.3% potential downward tariff adjustment. On the basis of ATAF principles, the Board resolved to maintain tariffs at the current average of K95.15/kWh as the ATAF outcome is within the ±5% statutory trigger band.

 

SIGNED

 

Rt. Rev. Dr. J.P. Bvumbwe                        Dr. Collins Magalasi

BOARD CHAIRPERSON                             CHIEF EXECUTIVE OFFICER

4th April, 2019                                          4th April, 2019