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Sunday, February 9, 2025
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ZESCO to Reapply for Emergency Tariff Adjustment

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Amidst a biting power crisis where the national power utility ZESCO Limited (ZESCO) is unable to guarantee even three hours of power supply daily, it appears more than likely it will resubmit its application for a tariff adjustment affecting commercial and domestic consumers.

At a public discussion on load shedding Thursday night, ZESCO Managing Director Victor Mapani wondered if it was time to reconsider that no power was more expensive than no power, echoing the regulator’s earlier statement that having no electricity is more expensive than expensive electricity.

In August, the Energy Regulation Board (ERB) made a wholesale rejection of ZESCO’s application to adjust tariffs over an emergency period of nine months “to avoid unintended consequences on the economy.”

ZESCO sought to increase the price of electricity by a range of 38% to 156% on consumption exceeding 200 units per month for its regulated commercial and residential customers.

Shortly after this rejection, the country was plunged into unprecedented curtailment of power as ZESCO went into emergency mode after losing a further 150MW of supply as a result of Maamba Energy taking one of its units into scheduled maintenance and being unable to import more volumes from the regional market. Weekly schedules were tossed aside as ZESCO could not manage to commit to any supply. Consequently, domestic users have been enduring anything from 24 to 96 hours without electricity.

A month later, however, Mapani stated that ZESCO would push in the application again to enable it to raise US$14 million from commercial and residential customers to contribute to its monthly import bill. The mines and other industrial customers are already contributing.

ERB Director General Elijah Sichone stated that the regulator was looking forward to the application, which the board would process accordingly.

However, in rejecting the earlier proposal in its entirety, the ERB said it was highly unlikely ZESCO would raise sufficient revenue from the emergency tariffs to meet the monthly bill needed to import power.
Mapani also disclosed that ZESCO has been importing power since 2023,

“Power imports never stopped. From February 2023, we’ve been importing from the SAPP [Southern African Power Pool] at 7.3 cents and when that contract ended, we locked it [45MW] in for another year at 7.5 cents. 45MW can power two industries, then we started ramping up to 406MW [currently] as it also reduced its exports.

He said ZESCO had turned into a net importer of power from being a net exporter only a few months ago because as exports went down, imports went up.

He said imports were more expensive, averaging 14.5 cents per unit while the combined commercial and residential tariff in Zambia averages 7.5 cents, resulting in a deficit.

The normal mine tariffs average about 9 cents but mining companies have been paying significantly more for emergency-priced power since around May this year.

“That is one of the reasons we requested an emergency tariff increase for a defined period to ensure our ability to import more power to cushion the gap so that people don’t go without power because the deficit has to be covered.

He also warned that starting to import power now would be different from what they had earlier wanted to do.

“If we started importing power today, we won’t have all the power as certain things have changed as everyone else is grappling for power.”

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