17 December 2012

Tanzania: Tanesco Rejects Figures On Power Hike Project

Photo: Chris Kirchhoff
Electricity pylons.

Dar es Salaam — The Tanzania Electricity Supply Company (TANESCO) has been forced to reject expert figures that favor its campaign to hike power tariffs.

This move was also rejected by power consumers in Tanzania.

Tanesco claims that it pays over $5.2m per day to generate electricity using diesel and Heavy Furnace Oil (HFO). Due to that, it demands an 81.27% tariff hike or run into bankruptcy.

But a consultant firm, AF-MERCADOS of Spain hired by Energy and Water Utilities Regulatory Authority (EWURA) reported that this year the state-power utility deserves an increment of 29.49% only.

The Acting Managing Director of Tanesco, Felchesmi Mramba said the consultant's assumptions were not realistic as they had overestimated 'plant factor' generation capacity.

It says Tanesco has increased oil-to-electricity generation dependency.

AF- MERCADOS notes that in the next three years Kidatu power plant expects to generate 88mw, Mtera 54mw, Kihansi 15mw and Pangani system 40mw.

The consultant figure also indicate that Ubungo One gas plant is expected to generate 85mw, Ubungo Two 95mw and Tegeta 87mw.

'These figures are not right since there is neither enough water nor gas to produce electricity,' said Mramba.

He adds that due to drought, the firm had lost 350mw that was produced using hydro-plants while the consultant has put on high side electricity from these sources and undermined oil plant.

Mramba stresses that without the suggested tariff increase, the company would make a loss of Tsh800m ($500,737) next financial year.

"The increment will only assist us to improve services but the company will not make a profit at all merely a break even," he said.

Mrambaexplained that they are forced to raise the power tariff due to the proposal by the government to scrap off oil taxes, the loan guarantees that were not implemented while the rains were not enough.

The EWURA Consumer Consultative Council over the weekend challenged the proposed automatic power tariff adjustment by the regulator, saying it implies over- protection of state-owned at the expense of consumers.

EWURA- CCC Chairman Mr. Said Mohamed said adjusting power tariffs whenever there was a rise in fuel prices, inflation or poor exchange rates only protects Tanesco, while forgetting its consumers.

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