BERA Rejects BPC Request To Raise Electricity Tariffs

In a rare balancing act by Botswana Energy Regulatory Authority (BERA), Botswana Power Corporation’s (BPC) 5 percent upward tariff adjustment has been rejected while the utility’s request for a P500 million subsidy has been slashed by P100 million.

According to its 2022 annual report, former CEO of BERA, Rose Seretse, notes that BPC submitted a tariff application for “a 5 percent upward tariff adjustment and a subsidy of[ihc-hide-content ihc_mb_type="show" ihc_mb_who="1,2,3,4" ihc_mb_template="1" ]

P500million for the year 2022/23” and states: “The final decision on this request was a 0 percent tariff adjustment and a P400 million subsidy.”

Seretse says the decision was taken to facilitate post-COVID recovery in the face of general price increases in the economy due to rising petroleum prices and VAT rate to 14 percent from 12 percent in July 2021.

Even so, the report notes: “As reported in the previous years, the level of imported electrical energy is still high due to the low availability of Morupule B plant.” It says for the year 2021/22, imported electricity constituted 49 percent of the total demand.

“The imported power therefore significantly contributes to the costs of the power utility,” says the report. “It is therefore critical for internal generation capacity to be increased via timely remediation of Morupule B and implementation of the Integrated Resource Plan (IRP).”

On other issues, the report indicates progress towards improved power generation in Botswana. “During the year under review, the Authority processed and approved a total of six power purchase agreements between Botswana Power Corporation and various power generation entities,” it says, adding that it also received licence applications for large scale power production, two of which were awarded.

BERA also received applications for small scale electricity production and one for a renewable energy licence, specifically Solar Photo Voltaic. Their sizes ranged from 100kW to 1000 kW.

The BERA report notes that in December 2021 the Authority initiated the Renewable Energy IPPs Support Project through a grant of USD 1 million from the African Development Bank (AfDB) to develop regulatory tools, instruments and technical studies to support Renewable Energy IPP facilitation and roll out.

The project is aimed at strengthening the environment geared towards encouraging private investments in renewable energy generation as part of implementation of the Integrated Resource Plan (IRP).