First Public Hearing on LEC’s Tariff Application

As the electricity sector takes shape, the Liberia Electricity Regulatory Commission (LERC) held its first public hearing on the Liberia Electricity Corporation (LEC) tariff application at the Kailondo Hotel.

The public hearing chaired by the Chairman of the Board of Commissioners Dr. Lawrence D. Sekajipo brought together stakeholders, the management of LEC, donors, interest groups and the public.

Dr. Sekajipo said the public hearing was being held in accordance with “Section 13.7(1)(h) of the 2015 Electricity Law of Liberia (the “Law”) and the related Regulations issued by the Commission.”

The purpose of the Law and these Regulations, Chairman Sekajipo said, was to ensure that all affected parties have “a fair and meaningful opportunity for participation” in the decision-making process of the “Commission. 

He told participants at the hearing that as required by the Law and related Regulations, the Commission’s decision in LEC’s application will be rendered in writing within 20 days of hearing and will address all substantive comments raised during the hearing or submitted to LERC. 

Chairman Sekajipo informed the audience at the public hearing that copies of the Commission’s written decision will be sent to all parties including individuals who provided written comments or oral testimonies during the hearing.

In the Tariff review submission, the Executive Director for Commercial and Regulatory at LEC Mr. Sam Zimbe said the Corporation was proposing that an increasing Block Tariff structure for residential tariffs be introduced with different increasing tariffs for different increasing consumption blocks to address an equity/fairness concern in order to offer preferential tariffs to low-income households and also to incentivize better demand management.

Mr. Zimbe said the Corporation is also proposing to introduce an extra- large customer category to provide incentives for customers involved in manufacturing and above a rating of 1500 kVA per month.

He explained that Corporation was recommending to the Commission that current residential pre-paid tariff be reduced from US$.0.35 to US$.0.30, residential post-paid from US$.0.35 to US$.0.30, commercial prepaid from US$.0.35 to US$.0.27, commercial post-paid from US$.0.35 to US$.0.27 and among others.

“The commercial losses in LEC, result mainly from outright power theft perpetrated by residential and commercial consumers. The new Power Theft Law is expected to help LEC address the high levels of power theft”, he lamented.

Mr. Zimbe continued that technical losses are stated at 12% but the level may be up to 15%. He explained further that a detailed assessment of technical losses has not been carried out by LEC, as this exercise requires a huge investment in installation of feeder metering and due to financial constraints LEC has faced, meters have not been installed on all feeders to allow a more scientific assessment of the technical losses on the MV and LV network.

He projected that commercial losses are forecast to reduce by around 5.0% by end of 2021 and a similar reduction trend is estimated for the years 2022 to 2024.

Mr. Zimbe told members of the BoC and audience that since January 2018 LEC has taken an active part in managing the close out of construction and rehabilitation of Mount Coffee Hydro Power Plant, the Mount Coffee 66 KV substations and transmission lines to Bushrod and Paynesville as well as the refurbishment and capacity increases of Paynesville, Kru Town and Bushrod 66/22 kv substations.

Following LEC’s submission, representatives of the Corporation addressed several tough questions from members in the audience on the performance and efficiency of the Corporation.

It can be recalled LEC recently submitted an application for Tariff Review in adherence to Section 13.7 of the 2015 ELL, the Electricity Tariff Regulations of May 4, 2021 and LERC’s Administrative Procedure Regulations of September, 2020.

In March 2021, LERC provisionally approved a request from LEC to implement an “Incentive Framework” for large electricity consumers using high security pre-paid meters. The proposed incentive level provides a 22% discount for large customers using the high security prepaid meters which equates to around US$0.27/KWh.

The decision to approve the LEC’s incentive scheme at the time was intended for LEC to attract potential large consumers to connect to its grid and to retain all large consumers as customers of the Corporation.

The approved tariffs are expected to go into effect January 2022.