Business resists power hike

via Business resists power hike – NewsDay Zimbabwe January 20, 2016

The business community says they cannot afford the proposed 49% increase in electricity tariffs suggested by two subsidiaries of power utility, Zesa Holdings.


Last month, the Zimbabwe Energy Regulatory Authority said the Zimbabwe Electricity Transmission and Distribution Company (ZETDC) and the Zimbabwe Power Company (ZPC) had applied to increase electricity tariffs this year.

The energy regulator said the increase was meant to cater for additional emergency power imports from regional utilities due to low supply from the Kariba Hydro Power Station, owing to reduced water levels in Lake Kariba.

In a notice yesterday, the Confederation of Zimbabwe Industries, Chamber of Mines of Zimbabwe, Commercial Farmers’ Union, Zimbabwe Farmers’ Union and the Zimbabwe Commercial Farmers’ Union said the proposed hike would suffocate their members.

“It was clear that every sector represented at the meeting cannot afford any tariff increase, and, in fact, some of the companies belonging to these sectors are struggling to pay electricity tariffs at current levels as evidenced by the current $1 billion owed to ZETDC by some consumers. We strongly oppose the application for tariff increase by ZETDC,” the statement said.

The associations said inefficiencies at power stations needed to be improved as energy conversion at Hwange Thermal Power Station was about 21% when the industry norm should be above 35%.

Small thermal stations like Bulawayo, Munyati and Harare were presently operating at 30% of their installed capacity and use expensive coal-washed peas, they said.

“As consumers, we have always been of the view that the dollar spent at these small thermals will benefit the nation better if deployed at Hwange Power Station,” the statement said.

The tariff increase comes at a time the country is experiencing high production costs with the Office of the President and Cabinet working on the ease of doing business to make the environment friendlier to investors.

Zesa Holdings chief executive officer, Josh Chifamba yesterday told NewsDay that the power utility made an application and it was the regulator that would make the determination.

“What is coming out clear is a lot of customers, including CZI, and others do not seem keen on the given option. The price that we will be given by the regulator will determine how we proceed.We will keep exploring cheaper options,” he said.

Zesa says it is owed $1 billion by consumers failing to pay due to economic challenges that include low disposable incomes and liquidity challenges.

The stakeholders called Zesa to restructure at all levels for cost containment and match the reduced levels of electricity generation and current economy.

The business community said an increase in power tariffs would work against efforts made by government and private sector towards addressing competitiveness and productivity.