21/12/2025
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The Botswana Republican Party(BPR) has objected to Botswana Power Corporationโs proposed 46% electricity tariff increase, warning that the hike could destabilize the national economy and trigger a dangerous cycle of grid defection that undermines the power utilityโs long-term viability.
In a submission to the Botswana Energy Regulatory Authority, BRP President Biggie Ganda Butale characterized the proposed increase as an attempt at โmonopolistic cost pass-throughโ that would violate BERAโs statutory duty to protect consumers and promote economic efficiency.
The partyโs objection, grounded in legal and economic analysis, argues that the tariff hike would add between 1.6 and 2.5 percentage points to national inflation while delivering minimal efficiency improvements or structural reforms at BPC.
According to the BRP submission, electricity is not an ordinary consumer good but a core administered price with economy-wide effects. The party warns that the proposed increase would disproportionately harm small and medium enterprises, the tourism sector, and agro-processing industries, while exacerbating income inequality.
The opposition party estimates that electricity demand would fall by only 5 to 10 percent despite the massive price increase, reflecting the inelastic nature of power consumption. This means households and businesses would be forced to cut spending in other areas rather than significantly reducing electricity use.
Perhaps most striking is the BRPโs warning about what it terms a potential โutility death spiral.โ The submission notes that Botswana has reached or exceeded grid parity for solar generation, meaning many commercial and high-income users can now generate electricity more cheaply than purchasing from BPC.
The party argues that a tariff shock of this magnitude would accelerate third-party generation and self-supply, leading to grid defection by high-revenue customers. This would erode BPCโs sales base, increase fixed-cost recovery pressures, and necessitate repeated future tariff applicationsโa cycle recognized internationally as a utility death spiral
Rather than approving the tariff increase, the BRP is calling on BERA to require BPC to submit a credible efficiency and reform plan with independently verifiable targets. The party suggests several alternatives to tariff-led adjustment, including enforceable loss-reduction targets, management performance benchmarks, procurement reform, and conditional fiscal support linked to reform milestones.
The submission also argues that BERA should permit Independent Power Producers to offload excess capacity onto the national grid, noting that global electricity prices in renewable-dominated systems are trending downward due to declining solar and wind costs.
The BRP grounds its objection in the Botswana Energy Regulatory Authority Act of 2016, which requires BERA to balance commercial sustainability with public welfare and economic efficiency. The party argues that a 46% increase represents an extraordinary adjustment that requires strict necessity, proportionality, and consistency with macroeconomic stabilityโtests it believes BPC has failed to meet.
The submission notes that in monopoly settings, cost-based tariff regimes risk legitimizing rent extraction rather than correcting underlying failures, particularly when costs are allowed to flow directly into tariffs without binding efficiency benchmarks.
โElectricity regulation must serve the national interest,โ the BRP submission concludes. โTariff increases that socialize inefficiency and weaken the economy do not meet that test.โ
The party is requesting that BERA either reject or substantially moderate the proposed increase, and condition any future tariff adjustments on demonstrable performance improvements at BPC.
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