Tuesday, May 28, 2024
7.9 C
Maseru

Customers owe LEC over M239 million

Business

Seabata Mahao

Lesotho Electricity Company (LEC) could disconnect defaulting customers this winter to tackle its tight financial situation.

LEC’s managing director, Mohato Seleke, recently told journalists that his organisation is struggling to function properly due to a massive M239 million customer debt hanging over its head.

Seleke said as of May 29 this year, the utility company was owed M57 million by the private sector, over M80 million by the public sector, and M102 million by the general public.

The onset of winter, which increases demand for power for heating purposes, will only heighten LEC’s spending on purchasing power.

“It is not easy for the utility to stay afloat. Consumers, businesses, and government institutions should help us to pay for the electricity,” Seleke said on Tuesday.

“It is extremely difficult to keep LEC afloat. Lesotho’s economy is weak but we do not want to expose its power challenges.”

He warned that LEC would be unable to keep the lights on this winter if clients do not come forward to settle their outstanding bills.

“Pay the debt to avoid danger. I am giving final warnings which I do not like to do, but the debtors leave me no choice. I am sounding the trumpet to warn them about the impending danger.”

In the past LEC has cut off defaulting clients, resulting in negative consequences on service delivery for various public institutions.

Among those previously affected were the High Court, the Ministry of Trade and Industry, the Ministry of Labour and Employment, and the Water and the Sewage Company (WASCO).

“Disconnections happen when all avenues have been exhausted by the utility to engage the clients, but sometimes they disregard us.”

Seleke said LEC would this week embark on a debt collection exercise, having communicated on numerous occasions with their clients to settle their bills.

“I have to collect the debts, otherwise we are going to be in deep trouble. At the end of June, for the first time we are going to submit a ‘cost-reflective tariff’ and a multi-year application to the Lesotho Electricity and Water Authority (LEWA),” Seleke said.

Seleke explained that LEC imports expensive energy from South Africa and Mozambique to augment domestic power generation at the ‘Muela hydropower station.

He said effective from June this year during peaks (07:00 hours- 10:00 hours and 17:00 hours – 19:00 hours, LEC will be spending M5.22 to buy one unit of power from outside the country.

“The more South Africa suffers a power crisis, the more expensive it is for Lesotho, and we are already paying 18.69 percent tariff increase effective from April that Eskom implemented.”

He further highlighted that their ongoing power purchasing talks with Mozambique are likely to result in higher prices than those in South Africa.

He welcomed the government’s ongoing domestic power generation interventions, but it would not be enough to cover the country’s power demand.

“The government has embarked on a journey to produce renewable energy. The government has built a solar plant at Ha-Ramarothole, Mafeteng which is expected to produce about 30 megawatts; a move that is expected to provide some relief to the utility,” Seleke said.

- Advertisement -spot_img
- Advertisement -spot_img

Latest article

Send this to a friend