via ZESA seeks tariff increase | The Herald December 15, 2015
Martin Kadzere Senior Business Reporter
POWER utility Zesa Holdings is seeking regulatory permission to increase electricity tariffs by as much as 29 percent to cover rising operational costs, sources at the company said. Zesa has proposed an average tariff of between 12,2c kWh and 12,7c kWh from the average 9,86c kWh. The proposal for the tariff hike has been submitted to the Zimbabwe Energy Regulatory Authority for consideration. Analysts, however, said given the current economic challenges, Zimbabweans might not be ready for a tariff increase.
“We arrived at that range because it is cost reflective,” said the source. “At the same time, we need to have money for capital projects and for importing additional power.” Zesa is currently generating close to 1 000 MW, far below peak demand requirement of 2 200MW. No official comment could be obtained from Zesa by the time of going to print yesterday.
ZERA chief executive Engineer Gloria Magombo could neither confirm nor deny. She said she was away and would not know if the power utility had submitted the tariff hike proposal or not.
Energy and Power Development Minister Dr Samuel Undenge recently told a business meeting that Zimbabweans should brace for a significant increase in tariff to boost demand. “Tariff adjustments are inevitable in 2016, but we make sure that these will be minimum,” he said. “The situation we are in is not normal and we therefore need to bite the bullet.
“Power is not going to come cheaply. We will have to sacrifice if we are to lessen our load shedding hours. Yes, things are tough but we should pay for the service,” he added.
Zesa had previously sought permission for a tariff increase, but was turned down by the regulator. Economists say consumers, particularly commercial cannot afford a tariff increase as high costs of electricity and unreliable supplies have been identified as one of the factors affecting competitiveness of local business.
Zimbabwe is currently implementing various projects to boost electricity supplies. Work on the expansion of Kariba Hydro Power Station – to increase the capacity of the plant with 300MW – is underway.
Early this month, Zimbabwe signed preferential buyer credit loan of close to $1 billion with Eximbank of China for the expansion of Hwange Thermal Power Station. The loan will be extended at a concessionary rate of 2 percent per annum over 20 years. Sino-Hydro was contracted to undertake the project, expected to cost about $1,5 billion.
On completion of the project, the plant will add 600 megawatts to the national grid, currently under pressure due to subdued production at the country’s main power stations.
COMMENTS
Less electricity …. greater cost….. When will we see one single ZESA employee resign … To reduce these costs??????? NOT LIKELY—-
There we go again. Even without studies to prove it, it is not too off the mark to believe that a significant number of connected consumers are not paying their bills, mostly the politically connected ones who incidentally are the most wasteful users. Then the ZESA salary bill itself is unsustainable. Then there is this rural electrification where chiefs enjoy free electricity whilst industry has to rely on diesel generators. When will this end? Before increasing tariffs ZESA should do the simple arithmatics – who really uses electricity and for what? Of these users how many actually pay their bills? what proportion of revenue is the ZESA salary bill? Biting the bullet should also include reducing the perks for ZESA managers and other top “Office staff”.
Look on the bright side. These tariffs and lack of reliable supply are starting to make off grid solutions viable. A dead ZESA is a worthy objective
ZESA doesn’t need these terrific increases. What is required is for every Zimbabwean who is using ZESA electricity to pay up their bills . The problem we have as a nation is that we have people who just want everything for free. Electricity is not cheap to generate and we must pay for it. If we all pay our bills, ZESA will be able maintain the infrastructure and hopefully invest in more power generation capacity . I am a farmer who consumes electricity for our tobacco curing. We need consistency in terms of power supply, but we can’t get it because many of you don’t pay your bills. I am proud of supporting ZESA by simply paying my bills in full both for my business ($3000 per month) and for domestic ($400 per month). I will soon invest in solar in to reduce the burden on the national grid. Unfortunately, some of these defaulters are part of the Leadership , which sets a bad example. ZESA , just get everyone to pay. Don’t allow politicians to threaten you.