LEWA: The tariff review process

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The Lesotho Electricity and Water Authority (LEWA) regulates the Electricity Supply Industry (ESI), and the Urban Water and Sewerage Services Sub-sector (UWSSS) in the country. Amongst others, LEWA is mandated to regulate tariffs for services provided by the Lesotho Electricity Company (LEC) and Water and Sewerage Company (WASCO). In terms of the enabling Act, LEA Act of 2002 as amended, the Authority is required to consult the public on the reasonableness of the tariffs review proposals made by the regulated utilities prior to making the final decision on the applicable tariffs.

In terms of the regulatory tools, the utilities’ Applications for tariff reviews should amongst other things, comply with the Tariff Review and Filing Procedures. Once the Authority has determined that the Application is complete, it would then be published through the local media channels and District Administrators offices. The intention is to afford the public an opportunity to read and familiarise themselves with the Application and/or provide comments in writing to LEWA.

Public consultations set the stage for utilities to present the reasons that motivated the review of the tariffs. The utilities’ presentations are simultaneously made to both stakeholders throughout the country and the LEWA Board. Stakeholders and the LEWA Board are also granted the opportunity to present their views on the reasonableness of the Application.

The success of this process depends on the active stakeholder participation. Stakeholder participation is regarded as important by the Authority during the regulatory decision making processes including the tariff review process. The final step in the tariff determination process is the Authority’s consideration and decision on the final tariffs. The Board makes the Final Tariff Determination by making an in-depth analysis of the Application, considering the cost drivers of the tariff review, submitted evidence of the need for a tariff increase and the analysis of the views of the stakeholders. The LEWA Board then holds a Press Conference immediately after reaching the Final Tariff Determination.

The stakeholders are therefore urged to appreciate the above process and encouraged to always participate actively in all matters that relate to the tariff reviews.

Publication by LEWA

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