ZERA rejects proposed electricity hike

via ZERA rejects proposed electricity hike | The Herald 27 August 2014

The Zimbabwe Energy Regulatory Authority has shot down the Zimbabwe Electricity Transmission and Distribution Company’s request for a 5 percent power tariff increase, in what may force ZETDC to cut its budgets.
ZETDC’s application was for a five percent increase on the power tariff of 9,86c kWh to 10,36c kWh in line with the utility’s revenue target of $890 million, but ZERA said the request will not be granted.

The power transmission and distribution company said it had consulted with Government, mining, agricultural, commercial and domestic consumers of electricity to determine the decision it took.

“After duly considering the tariff application, the macro-economic conditions prevailing in the country, written and oral submissions from various consumers and stakeholders as well as facts and evidence provided by ZETDC, the ZERA board made the following decision; that the tariff be maintained at the previous level effective September 1 2014,” ZERA said in a statement yesterday.

ZERA said in coming up with the determination, it had reasoned that the current tariff level was sufficient to cover ZETDC’s costs.
The authority said its board also urged ZETDC to improve debt collection and enhance its efficiencies in order to cut down on the costs.

The Zimbabwe Electricity Transmission and Distribution Company will be forced to cut its maintenance budget to rein in costs after regulator turned down its request to increase power tariff by 5 percent.

ZETDC managing director Mr Julian Chinembiri early this month said they would cut maintenance costs if the tariff was not increased.
However, he said in the event ZERA dismissed the request to hike tariffs, ZETDC would be forced to cut the maintenance budget, which would compromise reliability of the transmission network.

“In the event that they do not award the tariff increase we would have to cut (costs) somewhere of which most of the costs are fixed.
“If the maintenance budget is reduced, it means that service delivery and network reliability will be low because of lack of maintenance. Maintenance is the only area where we can cut,” he said.

In fact, ZETDC had initially made a request for a 12 percent tariff increase, which was going to be a record increase for power.
Eventually, the power utility settled for less tariff increase request of 5 percent to avoid putting pressure on the cost of goods and services arising from the high cost of electricity in the country.

COMMENTS

WORDPRESS: 4
  • comment-avatar
    sillywho 7 years ago

    There is one thing that is infinitely worse than high-cost power. That is no-power!

    The utility is owed nearly a billion dollars for power that was produced and delivered and then stolen or freeloaded. In a modern functioning economy, the utilities must function properly or else just about nothing else will. The problem for Zim is not so much the generating capacity, it is the parasitic thieves and freeloaders. If anyone from the government or the electric utility accidentally happens to read this, please remember this is good advice—and I give it away.

  • comment-avatar
    John Thomas 7 years ago

    Why not get the ZANU MF’ers to pay their bills instead.

  • comment-avatar
    Mixed Race 7 years ago

    It is not true that you have only one place where you can cut costs.Here are the places you can cut costs to improve your organisation’s income-
    1-Reduce your pensioners and your staff electricity aloowance from over 1200 kWatts per month to 800 kWatts which you can sell to us to increase your sales thus improving your income.
    2-Streamline your organisation by getting rid of useless personnel.This will reduce your salary and allowance bills.
    3-Increase efficiency thus making more usable electricity available to the public to give you more revenue provided you collect it.
    4-Be brave enough to take a decisive decision to collect money from government departments and politicians.If they refuse stand your grounds by resigning to prove that you are not a political appointee.
    5-NEVER think an increase in tariffs is the best method of increasing your income because this is a short term crisis method which has short term results which backfire within months.The best method is efficiency and reliability of your product.

  • comment-avatar
    Che'guevara 7 years ago

    Thank you mixed race. These guys think they can cushion their luxury lives and fat salaries by fleecing the public. They should face the govt and politicians to pay up their debts not overbudening the ordinary man everytime you need a bail out.