Part of ESCOM’s K112 billion loss is due to EGENCO’s and IPPs’ billing systems

The car in question when it was being rehabilitated 

* CEO Kumwenda also clarifies that the official Land Cruiser that he inherited is an accident-rehabilitated car and is 5 years old

* After some members of the public attacked ESCOM, with some accusing that the CEO drives an expensive vehicle

By Duncan Mlanjira

When Electricity Supply Corporation of Malawi (ESCOM) does not utilise power provided by Energy Generation Company (EGENCO) and private independent power producers (IPPs), it is still billed.

ESCOM Chief Executive Officer, Kamkwamba Kumwenda disclosed this on Tuesday, saying part of its  K112 billion loss is due to EGENCO’s and IPPs’ billing systems.

He said ESCOM installed a meter that indicates how much power they have been supplied while EGENCO did not and when they receive invoices from the producer, they still indicate capacity charges rather than what they supplied.

On the other hand, JCM Power as the IPP supplying 20 megawatts (MW) solar energy at Golomoti plant in Dedza and 60MW at Nanjoka in Salima as capacity charges rather than what ESCOM used.

Kamkwamba said when their system shuts down when it detects low power supply from the solar supply due to variables in weather patterns.

“When there is a crowd cover and the power fluctuates, our system has to shut down to go back to reliable supply from the hydro plants but we are still charged for it,” he said, described this as “dimmed energy” — which is part of the contract as agreed with the IPPs and Power Market Limited, the single buyer of power.

All this is coming following a statement from Democratic Progressive Party Member of Parliament, Welani Chilenga — who is chairperson of the august House’s Natural Resources and Climate Change Committee — when he accused ESCOM of charging a “ghost contract” as ESCOM continues to charge Malawian consumers K3 per kilowatt/hr, which was added to the tariff for the back up diesel powered power generators supplied by Aggreko.

The Aggreko contract was terminated in April this year but consumers are still being charged the K3 per kilowatt/hr tariff but Kumwenda said that percentage was set aside to be used to buy gensets for EGENCO — to be owned by the citizenry and not to benefit foreign companies.

He also declared that ESCOM was on the death bed and there was need for Malawi Energy Regulatory Authority (MERA) to push Parliament to approve raising power tariff because the power utility service provider is bearing the brunt of the high costs it incurs from EGENCO and the other foreign private investor IPPs, who charge in dollars.

At a press conference in Blantyre on Tuesday Kumwenda said EGENCO and the IPPs charge ESCOM K140 per kilowatt/hr, yet ESCOM charge the same kilowatt/hr at K104 from the end user, the consumer.

He added that unless MERA gets the jurisdiction from Parliament to increase power tariff to over K140 per kilowatt/hr, ESCOM faces a bleak future since it will forever be making losses to the extent that it shall even fail to pay its staff’s salaries.

Following Kumwenda’s suggestion to transfer the burden to consumers by increasing the tariff, some members of the public attacked ESCOM, with some accusing that the CEO drives an expensive vehicle.

But Kumwenda has explained that he inherited the official Land Cruiser that which is an accident rehabilitated car and is 5 years old.

“I could have asked for a better car but the economic situation of the company could not afford that because, as I said at the press conference, I found a situation where ESCOM was failing — and continues — to provide some services because we don’t have the cash flow.

“We are failing to effectively provide new connections because we can’t afford to buy new materials; we can’t upgrade our distribution infrastructure.”

He reiterated his plea that the consumer tariff must be increased by K60-K70 per kilowatt/hr for ESCOM to offer the best services to the nation that include providing for new connections to generate more revenue and upgrade the distribution network — whose infrastructure is outdated.