Modalities of Assessing ESCOM’s Performance and Applicability of the 4th Base Tariff Tranche
The Malawi Energy Regulatory Authority (MERA) would like to inform the general public that the assessment of Electricity Supply Corporation of Malawi Limited (ESCOM) performance and whether the utility qualifies to be granted a 10% tariff adjustment will be done in consultation with key stakeholders.
In October 2018, MERA approved a 31.8% ESCOM base tariff covering the four-year period from 2018 to 2022. The implementation of the base tariff was segmented into four annual tranches as follows: 20%, 7%, -3%, and 10% tariff adjustments for the first, second, third and fourth years, respectively.
The conditions for implementing the 2018-2022 base tariff clearly stipulate that the award of any base tariff adjustment should be founded on ESCOM’s performance against the Key Performance Indicators (KPIs) that were agreed upon in 2018. These KPIs include both financial and non-financial measures. The KPIs cover such areas as current ratio and acid test; maintenance costs as a percentage of operational costs; net surplus as a percentage of revenue; debt collection period; connection targets; and system losses and interruption indices.
The 2021/2022 fiscal year being the fourth and final year of implementing the 2018-2022 base tariff where a 10% base tariff adjustment will be considered, MERA will engage key stakeholders to seek their views and input before any tariff adjustment can be implemented. As with the previous years, ESCOM’s performance against the Key Performance Indicators will be scrutinised.
Once the consultations are concluded, MERA will communicate the outcome of ESCOM performance assessment and fourth base tariff tranche consideration.
For more information:
Phone: 01 774 103/135 or 01 775 810