In its proposed electricity tariff submitted to the Liberia Electricity Regulatory Commission (LERC), the Liberia Electricity Corporation (LEC) is advocating an increase in the cost of electricity that will affect consumers across Liberia.
If approved, the new tariff structure is scheduled to take effect on January 1, 2025, and remain in place until December 31, 2027.
This proposal aims to raise concerns among citizens already burdened by rising living costs, prompting calls for transparent processes, stakeholder engagement, and accountability.
The proposal, submitted on October 21, 2024, is by Section 8.1(2) of the 2015 Electricity Law of Liberia, which mandates that no entity may charge a tariff other than one approved by LERC. This legal backing emphasizes the need for regulatory oversight in determining fair and sustainable pricing, particularly as the current tariff regime, implemented in January 2022, is set to expire by the end of December 2024. However, the drastic increases suggested in the new proposal have ignited a public debate over affordability and accessibility.
According to the document presented by LEC, the proposed tariffs reveal sharp increases across all customer categories. The “Social Tariff” would see a 40.0% hike for prepaid users, with the variable cost rising from $0.15 to $0.21 per kilowatt-hour (kWh). Prepaid residential customers would face a similar increase, with a 37.5% hike, as rates climb from $0.24 to $0.33 per kWh. For postpaid residential users, the variable rate would also increase by 37.5%, moving from $0.24 to $0.33 per kWh. Non-residential customers, prepaid and postpaid, are expected to experience a 36.4% rate increase, raising concerns over the economic impact on businesses and service providers.
Perhaps the most striking adjustment is in the connection charges. Single-phase meters, currently priced at $20 per customer, would rise to $82, representing a massive 310.0% increase. Similarly, the charge for three-phase meters would jump from $350 to $630, an 80.0% increase. These surges in connection fees could deter potential consumers from connecting to the grid, particularly in low-income areas with limited access to electricity.
In response to LEC’s submission, LERC has requested additional documents to justify the proposed tariff structure. The Commission has committed to conducting a comprehensive review process, involving public hearings, stakeholder engagements, and outreach initiatives to ensure transparency and gather input from diverse parties. By doing so, LERC aims to incorporate feedback from consumers, civil society organizations, and other stakeholders before finalizing any decisions on the tariffs.
The Commission’s statement emphasizes the importance of consumer rights, stating, “We encourage all stakeholders to participate in the upcoming engagement activities to voice their opinions and recommendations.” This open approach is critical considering the proposed hikes, as it offers a platform for electricity users to express concerns, advocate for fair pricing, and seek clarity on the cost structure presented by LEC.
The proposed rate increases could have a significant impact on household budgets, especially for lower-income families who rely on affordable electricity for essential needs. The Social Tariff, which is intended to offer a cost-effective option for low-income households, would still see a 40% increase, potentially limiting access for those who need it most. Rising electricity costs could force some families to reduce consumption or explore alternative energy sources, which may not be as reliable or affordable.
Businesses, particularly small and medium enterprises, could also feel the strain of increased electricity costs. As rates for non-residential customers rise, the cost of doing business in Liberia could grow, impacting profitability and potentially leading to job cuts or reduced services. The agriculture, manufacturing, and retail sectors, which are heavily dependent on electricity, may struggle to maintain their operations, and these challenges could have a ripple effect on the broader economy.
Consumer advocates are calling on LEC and LERC to provide a clear rationale for the proposed increases. Critics argue that without transparency on how these rates are determined, it will be difficult to assess whether the hikes are justified or if they represent an unnecessary burden on consumers. They emphasize the need for LEC to demonstrate how increased revenues will be used to improve the reliability, quality, and reach of electricity services across Liberia.
Public sentiment reflects a deep concern over affordability and the perceived disconnect between service quality and rising costs. Citizens question whether the proposed tariffs will result in tangible improvements in the country’s electricity infrastructure, plagued by frequent outages and limited coverage. Many are skeptical, fearing that higher rates will not necessarily translate to better service, leaving them to pay more for the same unreliable power supply.
As the regulatory body overseeing Liberia’s electricity sector, LERC has a critical role in ensuring that electricity tariffs are fair and sustainable. The Commission’s review process will assess the reasonableness of LEC’s proposed rates and the methodology used to determine these charges. In doing so, LERC must balance the need for LEC to cover operational costs and invest in infrastructure with the need to protect consumers from undue financial strain.
In addition to reviewing LEC’s proposal, LERC is also evaluating a separate tariff application from Jungle Energy Power (JEP), a company operating in Bong and Nimba Counties. Both tariff reviews are set to conclude by the end of December 2024, allowing any approved changes to take effect at the start of 2025.
