This is the solution to tanesco’s cash woes

The 40 per cent power tariff increase that will come into effect on January 1 is bad news for electricity consumers in all brackets. Consumers, both commercial and domestic, will have to dig deeper into their pockets to pay for electricity, and the consequence of this is that prices of goods and services are bound to rise all around.

It is beyond debate that Tanesco is in dire financial straits and desperately needs more money to stay afloat. Power consumers have been told that it would be impossible for Tanesco to continue operating without raising tariffs, which were last increased on January 1, 2011.

In the short term, this could be true. But the long-term solution to Tanesco’s financial woes lies in the restructuring of the power utility firm.

In its present form, the company is too unwieldy to meet its challenges. Tanesco is responsible for power generation, transmission and distribution. Breaking up the giant company into three separate units, with Tanesco taking the sole responsibility of distribution, for instance, would be a good idea.

It would enable the company to be in charge of power generation to seek investment for exploration of alternative sources to expand electricity generation.

The other units would also focus fully on power transmission and distribution and attract investment to enhance the infrastructure for efficiency.

Tanesco is also owed billions of shillings in outstanding power bills by government ministries, departments and state corporations. These must be made to pay up to ease Tanesco’s financial burden.

Also, the ongoing exploration of alternative power sources should be speeded up to expand electricity generation capacity. Plans to tap solar, wind energy and gas must be given priority to reduce dependency on hydropower, at a time when the consequences of climate change are making dams prone to drought. In other words, the shortfall between electricity generation and demand needs to be addressed.