Zesa yet to effect tariff hike

STATE power utility,  Zesa Holdings (Zesa), is waiting on the energy sector regulator, Zimbabwe Energy Regulatory Authority (Zera), to approve a proposed tariff hike of between 12c per kWh and 16c per kWh, it has emerged.

In a statement, the ministry of Energy said the hike — strongly opposed by business and other stakeholders — had not been implemented as yet.

“Zera is still consolidating stakeholder inputs before finalising the tariff approval. The regulator has not done so, and therefore there is no change on the current tariff,” the ministry of Energy said.
?The energy sector regulator met with stakeholders at the beginning of the year in consultative meetings which revealed that most quarters were against the 49 percent hike.

ZETDC wrote to the Zera requesting a tariff hike to raise funds “to procure 200MW capacity from emergency power sources” to cover the electricity shortfall occasioned by low water levels in Kariba Dam last year.?Currently, Zesa is selling electricity at 9,86c per kWh, which is thought to be too low compared to regional averages of 14c per kWh.

Recent reports had indicated that Zera had approved an average tariff of 11,2c/kWh from 9,86c/kWh.
?However, the 11,2c/kWH is lower than the price at which Zesa is importing electricity from South Africa and Mozambique, as it emerged Mozambique’s EDM had bargained for a tariff of about 15c/kWh.?Industry recently proposed that ZETDC needed to conduct a restructuring exercise at all levels to match reduced electricity generation, instead of effecting a tariff hike.

In a joint statement recently issued by the Confederation of Zimbabwe Industries (CZI), the Chamber of Mines Zimbabwe, Zimbabwe Farmers Union, Commercial Farmers Union and Zimbabwe Commercial Farmer’s Union, the business organisations said the tariff increase was going to affect industry.

The industry bodies noted that significant cost reduction could be realised within the power utility. This was after the business member organisations had met to discuss the proposed upward review in the electricity tariff proposed by the state utility provider.

Industry also expressed concern over the decision taken by government to bring into the tariff equation the emergency power from diesel generation.

“This proposed 200 MW emergency power is coming at a huge cost to the economy.
?“The investment by the economy in this proposed scheme can be better utilised if deployed to give permanent solutions to this energy crisis…

“All imported power is coming from utilities operating in weak currencies, and therefore we believe that the cost thereof should be low, not to cause a review of tariffs upwards,” said the industry bodies.

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