Wednesday, June 12, 2024

Ethiopian Electric to collect 35 billion birr monthly after new tariff adjustment


By the final phase of its tariff adjustment the Ethiopian Electric hopes to amass 35 billion birr per month from the current 7 to 10 billion birr monthly collection.
Early this week, EEP, EEU, the Ministry of Water, Irrigation and Electricity and the Ethiopian Electric Authority and other stakeholders held discussions about the new tariff adjustment which will be applied after approval by the Council of Ministers. This tariff adjustment is the first after 13 years.
In her exclusive interview with Capital this week Azeb Asnake (Eng.), CEO of EEP, told Capital that the maximum revenue the power sector will get from this adjustment, which will be fully effective at the end of the fourth year when approved by the Council of Ministers, is about 35 billion birr instead of the mere 7 to 10 billion birr they currently take in.
This will be done in three parts after it is approved. The regulator of the power sector the Ethiopian Electric Authority is responsible for the tariff adjustment. After the stakeholders’ meeting the Ministry of Water, Irrigation and Energy will submit it to the Council of Ministers for approval.
She said that the adjustment will not touch the majority of the general public.
“Actually the power tariff adjustment is done in accordance with protecting the low income population. We have about 2.9 million customers. Among these, about 1.5 million are using less than 50 KWH per month. So our study assumes that these are the low income groups,” Azeb said. “This figure is more than 50 percent of our total customers and this group will not be affected by the adjustment.
For them, “We will continue with the existing tariff,” she added.
According to the CEO, the other consumers, depending on their consumption are classified in groups. “Our intention is to bring the USD 1.8 cents per KWH to USD 7 cents per KWH which is the original value of the tariff,” she explained.
Even though several years ago stakeholders like the Ministry, power producers and relevant bodies undertook a study for tariff adjustments it was suspended repeatedly by the government.
The tariff was not adjusted for inflation or birr devaluation and thus was subsidized by the government.
“This not a big number, we have not increased anything for many years and though this looks like a leap, it is not. We should have revised our tariff in relation with inflation and devaluation but we have not done that,” Azeb said.
Azeb added “the tariff adjustment is not being applied now, we are discussing it with stake holders and the feedback we are getting is very positive. We agreed that it has to be adjusted because this is the lowest tariff in the world. So we discussed how it should be implemented. And we agreed that the implementation will be done through phases so that we don’t burden the consumers.” EEP is responsible for developing power generation, managing substations and transmission lines and overlooking power exports.

Read more