Friday, June 13, 2025
  • About
  • Advertise
  • Privacy Policy
  • Cookie Policy
  • Contact
  • Subscribe
  • E-edition
  • Login
  • Register
  • Home
  • News
  • Economy
  • E-Edition
  • Companies & Markets
  • In Business With
  • Lifestyle
    • Motoring
  • Sports
    Orebonye’s Defiant Rise Through North Africa’s Football Battleground

    Orebonye’s Defiant Rise Through North Africa’s Football Battleground

    Botswana Emerges as Sporting Powerhouse at 2025 RASA

    Botswana Emerges as Sporting Powerhouse at 2025 RASA

    With Eyes on Morocco, Botswana’s Mares Gear Up for WAFCON 2025 Amid Rising Hopes and Renewed Support

    With Eyes on Morocco, Botswana’s Mares Gear Up for WAFCON 2025 Amid Rising Hopes and Renewed Support

    Business Mind, Football Heart: Babitseng’s Journey to the COSAFA Executive

    Business Mind, Football Heart: Babitseng’s Journey to the COSAFA Executive

    Region 5 Empowers Optometrists for Inclusive Sport

    Region 5 Empowers Optometrists for Inclusive Sport

    Summer Kids Marathon Targets 1,500 Participants

    Absa promises “bigger and better” Kids Marathon

  • Subscribe
No Result
View All Result
  • Home
  • News
  • Economy
  • E-Edition
  • Companies & Markets
  • In Business With
  • Lifestyle
    • Motoring
  • Sports
    Orebonye’s Defiant Rise Through North Africa’s Football Battleground

    Orebonye’s Defiant Rise Through North Africa’s Football Battleground

    Botswana Emerges as Sporting Powerhouse at 2025 RASA

    Botswana Emerges as Sporting Powerhouse at 2025 RASA

    With Eyes on Morocco, Botswana’s Mares Gear Up for WAFCON 2025 Amid Rising Hopes and Renewed Support

    With Eyes on Morocco, Botswana’s Mares Gear Up for WAFCON 2025 Amid Rising Hopes and Renewed Support

    Business Mind, Football Heart: Babitseng’s Journey to the COSAFA Executive

    Business Mind, Football Heart: Babitseng’s Journey to the COSAFA Executive

    Region 5 Empowers Optometrists for Inclusive Sport

    Region 5 Empowers Optometrists for Inclusive Sport

    Summer Kids Marathon Targets 1,500 Participants

    Absa promises “bigger and better” Kids Marathon

  • Subscribe
No Result
View All Result
The Business Weekly & Review
No Result
View All Result
Home News

BPC motivates for another tariff hike

Cash-strapped Botswana Power Corporation (BPC) has warned that it has to raise P6.155 billion in the 2023 financial year and will therefore have to raise tariffs on households and businesses if the utility should become profitable.

mm by Tshepiso Gabotlhomolwe
February 23, 2022
in News
0
BPC motivates for another tariff hike

PALAPYE 10 February 2022, Sun rising over the Morupule Power Station in Palapye Botswana on 10 February 2022. It is a coal-fired power station supply power to the national grid for the country. (Pic:MONIRUL BHUIYAN/PRESS PHOTO)

0
SHARES
420
VIEWS
Share on FacebookShare on Twitter
  • Says it needs P1.55bn to become profitable
  • Has applied to BERA for 5% increase
  • Says it will still need the regular P500m in govt subsidy

This ‘reasoning’ is contained in its application to the Botswana Energy Regulation Authority (BERA) for approval to raise tariffs.

The regulator rejected BPC’s request to raise tariffs by 5 percent in the last financial year and allowed the utility only 3 percent. BERA is currently assessing BPC’s application and it will publish its outcome after concluding consultations with stakeholders.

This is how BPC motivates for another tariff hike in its latest application to BERA: “The projected tariff increase of 5 percent in the 2022/23 financial year provides the required revenue of P6.155 billion. The P6.155 billion is made up of return on Regulated Asset Base and Total Expenses of P1.437 billion and P4.718 billion respectively.”

It adds that the consumer tariff subsidy from the government will be P500 million and says it “undertook an assessment of the required revenue for the financial year 2022/23 in line with BERA prescribed methodology”. It requires money in these quanta, it says, in order to meet its operating, maintenance and financing costs. The 5 percent electricity tariff increase should be across all customer categories.

“The required 2023/24 projected sales revenue is P4.592 billion which translates into revenue growth rate of 11 percent compared to the 2021/22 financial year,” BPC says in its application to BERA. “The 11 percent revenue growth rate is made up of 5 percent and 6 percent for tariff increase and average energy consumption growth respectively.” It notes that the total cost of rendering its service constitutes all costs related to generation, transmission and distribution of electricity to the consumers.

However, it says it expects to continue recording under-recovery of costs for every unit of electricity sold until financial year 2023/24. Because of this revenue shortfall, it notes, there is need for the Corporation to continue receiving P500 million yearly tariff support from the Government of Botswana in the same period. “This financial support is meant to cushion the customers from sudden increases in electricity tariffs,” BPC argues.

The utility blames its recurring precarious financial position mainly on “non-cost reflective tariffs, low availability of Morupule B Power Station and the increasing cost of imported power”. It refers to the cushioning effect of the government subsidy but says it has significantly reduced over the last five years without matching electricity tariff increases.

“Therefore, the tariff proposal for the financial year 2022/23 is based on the yearly determination of the required revenue to meet the operating, maintenance and financing costs of the Corporation,” it argues in its application to BERA in which it says it has also considered future energy demands, especially from Large Power Users such as mines. “The need for sufficient revenues is also supported by Section 17 of BPC Act (CAP 74:01), which requires it to conduct its affairs on sound commercial lines and to produce a net operating income by which a reasonable return can be measured,” it says.

Regarding refurbishment of its infrastructure, BPC says, it was constrained to dedicate sufficient money to its capital expenditure plans due to its strained cash position in prior years. It therefore requires a healthy liquidity position to undertake long overdue refurbishment of its transmission and distribution infrastructure. “The commitment of the Corporation is to undertake a robust preventative maintenance plan to improve service delivery and it would be financed by cash from operations,” it says.

 

Tags: BERABotswana Energy Regulation Authority (BERA)Botswana Power Corporation (BPC)BPCBPC Act

Navigation

  • Home
  • News
  • Economy
  • E-Edition
  • Companies & Markets
  • In Business With
  • Lifestyle
    • Motoring
  • Sports
  • Subscribe

Recent News

  • EMPIRICA Actuaries NHI Note 1
  • June 13th Edition
  • Orebonye’s Defiant Rise Through North Africa’s Football Battleground
  • Mining Sector Crisis Deepens … As hundreds face job losses
  • June 6th Edition

Site

  • About
  • Advertise
  • Privacy Policy
  • Cookie Policy
  • Contact
  • Subscribe
  • E-edition

© 2021 The Business Weekly & Review. All Rights Reserved.

Welcome Back!

Login to your account below

Forgotten Password? Sign Up

Create New Account!

Fill the forms below to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In
No Result
View All Result
  • Home
  • News
  • Economy
  • E-Edition
  • Companies & Markets
  • In Business With
  • Lifestyle
    • Motoring
  • Sports
  • Subscribe

© 2021 The Business Weekly & Review. All Rights Reserved.

This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.
Are you sure want to unlock this post?
Unlock left : 0
Are you sure want to cancel subscription?