The Malawi Energy Regulatory Authority (Mera) should reject the Electricity Supply Corporation of Malawi’s (Escom’s) proposal for a 90 percent increase in the electricity base tariff from 2022-2026.

In the application that Escom made jointly with the Malawi Power Marketing Limited (PML), the power utility firm wants the tariff hiked by 80.75 percent from the current K104 per kwh to K187.98 in the 2022-2023, which is the first year of implementation. In the 2023-2024 year, the firm has proposed a K184.18 per kwh hike whereas in the 2024 -20225 and 2025-2026 year the firm wants a K210.59 per kwh and K249.15 per kwh increase.

Mera should not accept the proposal. Here is why. Escom has sweetened the figures it is using to support its proposal to gain cheap sympathy. In simple terms they are false. Escom should not lie.

On Wednesday last week, Escom chief executive officer, Kamkwamba Kumwenda lied to Malawians at a media briefing that Escom buys power from producers at K140 per kilowatt per hour (kwh) and sells the same to consumers at K104 per kwh. Kumwenda said this means Escom is operating at a loss. According to him, unless something drastic happens to save the situation, at the rate things are going, the giant parastatal was dying.

Then in a statement published in The Nation and The Daily Times of on August 17 2022 titled 2022-206 Electricity Base Tariff Application and on Escom’s website, Escom changed tune. It said it buys power at an average price of K74.69 per kwh.

So, if the power purchase cost is K74.69 per kwh, where did the K140 per kwh come from? Even with that markup of K30 per kwh, if well managed, Escom should be swimming in profits.

But hear this. All these are blue lies. Truth is that Escom’s average power purchase cost is K59 per kwh. Escom buys power from Electricity Generation Company (Egenco) and Independent Power Producers (IPPs). Egenco hydro power is the cheapest at between K14 per kwh and K24 per kwh. The average power purchase cost moves up to K59 per kwh with the power Escom buys from IPPs. Selling at K104 per kwh, Escom’s markup is K45 per kwh. All things being equal Escom should be swimming in profits.

But strangely Escom is putting the average power purchase cost (PPC) at K74 per kwh which includes the power it used to buy from Aggreko. We all know Aggreko gensets were decommissioned in April this year. So why is Escom still factoring in the Agrreko rates? But let us first throw some light on why the CEO twisted the figures.

Escom CEO invited all media houses—radio, TV stations, the print—to his press briefing. This obviously gave his narrative maximum publicity. The whole nation, therefore heard that Escom is dying because it is buying electricity at K140 per kwh and selling at K104 per kwh which would really be a loss if it were true. Then two days later, Escom in its proposal to Mera, which is only published in the print, and websites, gives another power purchase cost (PPC). Why? Fewer people read newspapers and or much fewer have access to anybody’s website.

Escom’s correct average PPC, without Aggreko, is K59 per kwh and not the K74.69 per kwh which the parastatal is shamelessly shoving into our faces. Escom’s sweetening of the case for an upward adjustment through the doctored figures, obviously made people sympathise with it. In the process, the organization suppressed views of those who would have submitted comments and suggestions against its proposal for a tariff hike. This is being dishonest, to say the least. It is lying to consumers. It is wrong. It is unethical.

Escom should sort out its gargantuan operational challenges which include misprocurements, largely due to political interference. Unless the parastatal resolves this, it will continue to push its inefficiencies to the consumer, which is not right.

From the foregoing Mera should reject Escom’s and PML’s proposal for a base tariff increase for the next four years. Escom is making huge profits, and therefore, it will not die; and Escom in its desperation for a tariff hike, has not presented the correct the state of affairs to the public.

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