Ethiopian Electric Utility Raises Electricity Tariffs

The Ethiopian Electric Utility (EEU) has announced a significant revision to its electricity tariffs, set to take effect on September 1, 2017. This adjustment is intended to better align electricity prices with the actual costs of supply, ultimately enhancing the financial stability of the utility.

Under the new Ethiopian Electric Utility tariffs system, different customer categories will receive varying levels of subsidy. For instance, customers using less than 50 kW will benefit from a 75% subsidy on the tariff difference, while those consuming between 50 and 100 kW will receive a 40% subsidy. Customers using between 200 and 300 kW will see a minimal subsidy of 4%. In contrast, those consuming between 400 and 500 kW will pay the full cost without any subsidy. For customers exceeding 500 kW, a cross-subsidy system will be implemented, allowing them to support other users.

The tariff increase, which amounts to an additional 6 birr per unit, will not be applied all at once. Instead, it will be rolled out gradually over four years through 16 accounting adjustments. For example, customers currently using 50 kW pay 27 cents per unit, but starting in September, this rate will rise to 35 cents. By the end of the four-year period, the tariff for this customer category is expected to reach 1.56 birr per unit.

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