Zesa proposes tariff hikes

Nqobile Tshili Chronicle Correspondent
ZESA is proposing to increase electricity tariffs starting next month saying this will enable the parastatal to import more power and reduce load shedding.

However, the Zimbabwe Energy Regulatory Authority (Zera) has said it will consult consumers first to determine if the proposal has merit.

The country is battling with serious load shedding, which the power utility has attributed to decreased water levels at Kariba Dam.

In statements yesterday, Zesa subsidiaries, the Zimbabwe Electricity Transmission and Distribution Company (ZETDC) and Zimbabwe Power Company (ZPC) said the tariff increase is expected to be implemented in January.

Zesa said higher tariffs will allow the power company to increase capacity by 200 megawatts.

The parastatal is seeking an increase of the electricity tariff from average current level of USc0.87/kWh. The tariff is derived using the approved Rate of Return (ROR) methodology provided in section in section 52 of the Electricity Act. The methodology was approved by the government of Zimbabwe in 2004, said the parastatal.

“The low water level at Kariba is forecast to deteriorate further in 2016 resulting in electricity generation output declining by further 200 MW. ZETDC also intends to procure additional power from both local and regional power producers to complement local suppliers,” said Zesa.

“The purpose of the proposed tariff increase is to cover the increased costs of the diesel generated power and additional imports in order to maintain supply at current levels and avoid shrinking the economy.”

Zesa said an increase in tariffs will improve power supply, reduce load shedding, improve service delivery and restore investor confidence.

However, Zera board chairperson Esther Mukosa said the authority can only give Zesa the green light to increase tariffs after consulting consumers.

“Zera will conduct a due diligence on the tariff review applications and interrogate the costs of ZPC and ZETDC in order to ensure that the required tariffs are justified,” said Mukosa.

“Zera shall be conducting stakeholder consultations on the tariff review applications with stakeholders representing various customer categories in January 2016 in order to get views and comments on the application for tariffs.”

Earlier this year Zesa proposed to increase tariffs by 5 percent but Zera rejected the proposal.

The proposed tariff increase is likely to be opposed by consumers who are already struggling to pay for electricity. Zesa is owed over $1 billion by its clients.

As a means of reducing power usage the government will on January 16 ban electrical geysers.

The public has criticised Zesa for failing to supply adequate power to the nation although most of its consumers are on pre-paid meters.

 

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  • Phillip Munyaradzi

    It looks as though its only goverment increasing fines, taxes, toll gates, Zesa, traffic fines, import duties when we are in a deflationary environment characterised by job losses, company closures, reductions in employee salaries etc. Goverment is operating from protected, monopolistic and privileged viewpoint. This will only make the already tough situation even tougher. We are heading into 2007 & 2008 by all means.