LESOTHO: POWER PROBLEMS BELIE EARLY ELECTRICITY CONFIDENCE

UNCLAS MASERU 000112

SIPDIS

SIPDIS

DEPT ALSO FOR AF/S, AF/EPS

E.O. 12958: N/A
TAGS: ECIN ENRG ECON LT
SUBJECT: LESOTHO: POWER PROBLEMS BELIE EARLY ELECTRICITY CONFIDENCE

REF: Maseru 41


1. SUMMARY: Although Lesotho officials confidently predicted
early in the year that domestic hydropower production would
shield the country from the South African electricity crisis
(reftel),an early arrival of winter has hastened seasonal
electricity needs and demonstrated that Lesotho's power grid is
highly vulnerable. Lesotho, which generates roughly 90% of its
own electricity during summer months, was not initially hard hit
when ESKOM, South Africa's electricity utility, cut back on its
supply to neighboring countries. As temperatures dropped,
however, rising demand has forced the Lesotho Electricity
Company (LEC) to introduce load shedding, random brownouts, and
price increases. The LEC's current measures are disruptive to
many residential consumers, but signs point to even more
difficult times for all end-users before the end of the winter.
END SUMMARY.

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Lesotho Joins Neighbors in Rolling Brownouts
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2. Several months ago, representatives of the Lesotho
Electricity Company (LEC) confidently predicted that their
domestic hydropower production would shield them from the South
African electricity crisis (reftel). However, an early arrival
of winter has hastened seasonal electricity needs and
demonstrated that Lesotho's power grid is highly vulnerable.
The Muela Dam hydropower facility produces 78 megawatts of
electricity, while Lesotho's maximum electrical load fluctuates
between 90 megawatts in the summer and 110 megawatts in the
winter -- an increase of about 20%. This seasonal increase,
which has arrived about a month earlier than normal, combined
with ESKOM reductions, has led the LEC to introduce scheduled
load shedding, random brownouts, and rate increases designed
specifically to reduce demand.


3. On April 1, the Lesotho Electricity Company (LEC) began
"load shedding" nationwide to balance the supply/demand
imbalance on the country's electrical grid. On April 14, LEC
publically released a "load shedding" schedule which announced
which communities would lose power on an alternating basis. The
LEC management also publically warned that the nation's
electricity grid continues to be unstable and additional
unscheduled brownouts may be necessary. An early arrival of
winter cold fronts, including an April 20 snowstorm in the
highlands, has led to unscheduled power cuts, wreaking havoc on
end-users.

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Electricity Rates Hiked to Curb Demand
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4. As of April 1, the Lesotho Electricity Authority (LEA)
implemented new rates designed to curb electricity consumption.
The LEA raised the price of electricity for residential
customers and street lighting by 12%, and the rates for
industrial users by 8.7%. This pricing move was substantially
less than the 40% increase requested by the national utility.

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Is the Worst Yet To Come?
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5. COMMENT: The LEC's confidence in the reliability of its
power provision, in the face of curtailed imports from South
Africa, appears significantly short sighted. Even more severe
measures are likely needed to bring balance to Lesotho's power
consumption and supply. In terms of electricity, it looks like
it will be a rough winter in Lesotho. END COMMENT.

NOLAN