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Manufacturers lament new electric tariff as exaggerated

Following the adjustment of electricity tariffs ranging from 30 percent to 90 percent, which is expected to enter into effect in the upcoming month, industrialists across Ethiopia are criticizing the increments claiming that it is over-inflated and requested the tariff to be revised.

On Thursday, the Ministry of Water, Irrigation and Electricity has made public, the new tariffs for households and industrial customers. During a discussion session with industrialists, State Minister Frehiwot Woldehana (PhD) said that the new tariffs are applicable for the coming four years and that the rates are segregated on a yearly basis.

For this year, the new tariffs due to be implemented from December onwards, will see electricity bills going up by at least 30 percent in the least block of electric utility which is 100 kWh. Hence, for instance, a household that consumes a 1oo kilowatt per hour (kWh) per month is required to pay 45.91 birr to that of the existing 35.65 birr. The renewed per kWh tariff rate for a monthly 100 kWh is set at 0.4591 birr increasing over the span of the next four years. The utility for households varies between 100 to 500 kWh and above 500 KWh energy blocks. At the end of the four year cycle, the 100 kWh energy consumers will be required to pay 54 percent more than the current bills. This way the newly endorsed tariff, in aggregate, reaches up to 85 percent for 1oo kWh user alone.

The adjusted tariffs for industrial customers went up further to introduce flat rates and demand charges on the basis of utility trends. Classified as low, medium and high voltage using industries; the tariffs have gone up as high as three folds. For instance, a low voltage industry that falls under the blocks of 220 kilovolt (KV) to 380 KV will be required to pay up to 200 birr per kWh differing from the existing 50 birr in the demand charge category.

According to Frehiwot, for over 12 long years, utility tariffs remained unaffected and currently, cost of production and operations has skyrocketed. The adjusted tariffs, he maintains are not even the real prices.

Frustrated, textile manufacturers, horticultures, metallurgies, glassmakers and the like have echoed their concerns. Tsegaye Abebe, a veteran cut-flower exporter, has downplayed the argument made by the State Minister.  

Tsegaye and majority of the business community members have asked when the recurrent power outages would be resolved.  Many have reverberated how serious the interruption has become and how challenging it has become for production activities. Some have urged the ministry along with the Ethiopian Electric Power (EEP) and the Ethiopian Electric Utility (EEU) to consider compensations.