Swapo lawmaker Tobie Aupindi has slammed the national power utility, the Namibia Power Corporation (NamPower), for putting undue pressure on consumers with tariff hikes on electricity.
He was speaking on Thursday in the National Assembly during debates on the budget which went all night.
"It is true that remarkable progress has been achieved through the National Integrated Resource Plan. But it is also true that NamPower has been raping consumers and the country."
"I think the biggest challenge NamPower has is making sure electricity is affordable and reliable. Reliability requires NamPower to have base load power in Namibia and not only solar."
Aupindi says that the recent application for a 17.44% tariff increase was driven primarily by the reevaluation of NamPower assets, which almost doubled.
"NamPower is allowed a certain percentage of return on asset and depreciation. If asset value goes up, then depreciation and return on assets goes up. Now if the asset value goes up then depreciation goes up, customers will need to pay more so that NamPower can be paid for that increase in return on assets and depreciation," he says.
Aupindi also accused NamPower of understating its projected generation from Ruacana, calling it industrial dishonesty.
He submitted that the government must insist that the projected income from Ruacana in their tariffs application should be the same or at least to be within 20% of the previous year's actuals.
"Otherwise if NamPower in their tariffs application understate the generation from Ruacana - which is Namibia's cheapest source of power - it causes the price of electricity to increase. And in reality NamPower makes more revenue at the expense of the consumer," he said.
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He added, "The last major contributor to the increase in electricity cost is historical under-recoveries or losses NamPower has made in past years, which NamPower is then allowed to recover from the consumer in the following year. So, in conclusion if NamPower is to use the previous financial years generation actuals, defer the asset reevaluation, and to defer the under recovery, NamPower will probably do well with an inflationary tariff adjustment of only 3% to 5%."
Aupindi has also taken issue with a decision of putting small defaulting municipalities on prepaid which he says although it will help NamPower collect its revenue, but it will destroy the economy.
"Imagine if you put all business and industry on prepaid, it will have serious cash flow implications on small and large business. Because if you put a municipality onto prepaid, the municipality will have to put all its customers onto prepaid to protect itself."
"Imagine if Namibia Breweries could be put on prepaid and the impact of that decision on its cash flow. City of Windhoek was asked to move on to prepaid and it refused because of the cash flow implications and the impact to industry as well," he said.
He has called on NamPower to rather enforce collection by either disconnecting defaulting customers or improve its stakeholder engagement.
"If you imagine how many pensioners' accounts municipalities write off every year but NamPower never contributes to these write-offs in anyway. This is a mix of voodoo economics and thinking. I support Vote 15," he said.
