ZESCO Limited’s application for an emergency tariff adjustment received varied reactions at the public consultation meeting convened by the Energy Regulation Board (ERB) today. Some citizens supported the application while others think ZESCO should look for different means of raising funds to import power instead of “burdening” its consumers.
The hearing, which attracted more than 200 members of the public who attended in-person and virtually, was called by the ERB to receive comments on ZESCO’s application to apply adjustments to the electricity tariffs in the residential, commercial, and maximum demand user categories.
Led by its managing director Victor Mapani, ZESCO explained that higher tariffs will affect 44% of its domestic customer base of 1,300,000 users while 730,000 consumers, representing 56% of its residential customers fall below the increment threshold as their rates will remain static.
Mapani said ZESCO had already concluded bilateral discussions with customers who are not regulated by the ERB, and they are already paying revised tariffs, some since May. These include mining companies on power supply agreements (PSAs) and non-mine users on PSAs.
“We have gone through our data and the result is that an average of 56% utilize not more than 200 units per month,” he said.
“In every society, there are always vulnerable people and business entities and we are proposing that they get a rebate in this difficult time. This is not a new phenomenon, we always attend to the vulnerable,” Mapani said.
He continued, “Be they commercial salons, barber shops, or welders if they consume less than 100 units every month they will get a 21% reduction while the tariffs for the other two bands remain the same and the last band for consumption above 500 units will increase by 38%.”
The proposed adjustments will affect 24% of commercial consumers, with a weighted combined consumption of 33MW, and will move the weighted tariff from K1.7/kWh to K2.2/kWh.
On the domestic front, ZESCO disclosed that the tariff hike will affect high users comprising about 5-7% of customers who consume nearly 25% of the residential load.
Participants, mainly those with industry knowledge, including Sipho Phiri – who spoke representing private power players, said the tariff hike was necessary and not enough for the need at hand. They argued that for the country to end load shedding, power tariffs needed to significantly increase.
Others sought to understand why every time there was a crisis, ZESCO ran to its consumers to raise funds by increasing tariffs and wondered why the utility couldn’t get a government bailout or access the capital markets for funding.
Mapani responded that the government was supporting ZESCO and advanced the first tranche of funds to enable it to import power from Mozambique. Further, he stated that with ZESCO’s mandate, the company can only make money from selling the product it generates or gets from someone else.
“For as long as tariffs are not attended to, to get to a commercial level, we will keep coming back to this,” he warned.
