TANESCO’s application on power hike to be released by mid of January 2012

ELECTRICITY users from the National grid in the country should expect new tariff charges of electricity which is scheduled to be announced countrywide by mid of January 2012. The new tariff charges which are yet to be identified, is in response to the recent application by the National power utility firm (TANESCO) which it had filed to Energy and Water Utility Regulatory Authority (EWURA) seeking a 155 percent increase in electricity price. EWURA’s Corporate Communications Manager, Titus Kaguo said in an exclusive interview last week in Dar es Salaam that, “Despite of the proposed increase, a special committee consisting of economic experts has been selected by his organization to work on various opinions raised by stakeholders in a meeting it convened early this month. Kaguo is on the view of the fact that, EWURA would look at the magnitude of the problem and weigh stakeholders’ views over the matter prior to the official announcement of the new hike which is scheduled to start in January. However, he noted that, there are several issues that TANESCO raised in its application which he says are also going to be looked upon, added that, EWURA is going to evaluate their authenticity before giving out its final decision. He added that, as for now the time frame is shorter to make a quick decision. EWURA received the application from the State owned power supply company under the certification of urgency from the Minister for Energy and Minerals Hon. William Ngeleja. Sources maintain that, the application was precipitated by emergency power generating projects TANESCO had entered into contract namely Agrecco, Symbion and IPTL’s heavy fuel for power generation which has raised energy cost.

EWURA's Communications Officer Mr. Titus Kaguo elaborating a point to journalists (not in the picture) during a press conference in Dar es Salaam recently.


During the meeting, stakeholders came up in arms to contradict such a request and instead some requested TANESCO to issue a comprehensive report that shows the actual costs of hiring the three power plants contracted to generate electricity to national grid. The percentage rise requested by TANESCO will raise an average current selling price of Tsh. 141/- per unit to Tsh. 359/- per unit. This is equivalent to 155 percent increase. “This is so exorbitant says one Yusuf Mbwana, an entrepreneur managing a kiosk and a small restaurant at Sinza madukani in Dar es Salaam. The views presented by the TANESCO’s Managing Director William Mbando that necessitated reasons for power increase is to enable his organization to curb with the drastic increase on the operational costs, and its efforts to reduce power shedding a common phenomenon in the country. Other reasons he maintained is that, if there would be no power increase by March next year, TANESCO will fail to execute other its important schedules such as its power producing plants which depends largely on oil energy source an aspect if left without attention, the country will be plunged into a total darkness. Others he stated are failure of the TANESCO to implement its legal contracts it had signed with some financial institutions (eg Banks) for its failure to reimburse its long standing loans it had taken due to lack of money, an aspect that is likely to cause a mutual of misunderstanding. Lastly, he outlined failure of the company to get money to conduct regular repair works and maintenance electricity systems on its daily operational activities. In a series of three years ago, TANESCO has been hiking its electricity power tariff concurrently. In January 2011, the power supply company lodged an application for 38 percent hike but was only granted 18 percent, while in 2008 it sought for 40 percent increase and was allowed 21 percent. Now for how much percent rate is likely to be allowed this year?