02/02/2025
NEWS UPDATE: ERB MAINTAINS ZESCO LIMITED EMERGENCY TARRIF PLAN OF INCREASED RATES TO COMPENSATE ELETRICITY IMPORTS AMID 3 -5 HOURS SUPPLY
Zesco Limited initially applied to ERB for an upward tarrif adjustment on 18 August 2024 to enable it source $14 - 15 Million monthly for power importation, owing to the anticipated shut down of the Kariba North Bank Power station and the shutdown of Maamba Collieries for the annual maintenance which would leave the country energy insecure.
However, the ERB "threw" it out the window, with Board Chairperson James Banda sighting that it was unlikely that Zesco Limited would be able to raise sufficient monthly resources that would be required for imports due to reduced electricity demands.
At the time, ERB added that increasing electricity tariffs would result in inflation pressures which would result in the high cost of production, high cost of living while many people would be pushed into energy poverty as they would spend more on electricity at the expense of other needs.
However, It was until 10 October 2024 that another seating of the same Board reviewed and approved the current increased tarrifs effected 1 November 2024 to 31 January 2025.
Upon expiration of this approved period, ERB has opted to maintain the tarrifs as approved in October last year.
ERB has applied rationale that the factors that triggered the initial tarrif adjustment are still holding among wlhich include ZESCOs deficit of about 1,000mW and the reduced water levels in Generation Dam reservoirs due to the 2024 drought.
Further and as earlier observed by the Board Chair when the initial application was rejected, ERB has reported that despite the increased tarrifs, ZESCO did not raise the target revenue of USD14 -15Million monthly and instead only managed a USD10million for November and December 2024 combined.
The Board observed that ZESCO did not sell the desired Quantum energy of 474GWh. Relative to Demand and Supply, a business cannot sell more than the consumer needs or if the business fails to Supply the customers needs, chances are that it may not sell upto its desired targets.
Analysing the foregoing, It is unlikely that the Utility may reach its targeted monthly numbers as presently, most consumers, 60% of the time report to still only get a low voltage supply of the essential commodity from about Mid-night to the 3 or 5am's where as some just hear of rumors of having had supply in the previous night or waking up to a phone charged barely to 60 or 80%
The other band of users has steadily migrated to the use of alternatives such as Solar whereas others who cannot afford these rates and will critically analyse any load on their system to keep the spend below the manageable kWh. In some cases consumers are not ready to pickup the cost passed onto them in the goods they purchase and once they shun away, then those businesses die.
The initial approval was based on the promise that ZESCO would further increase electricity supply hours from the dwindling three (3) hours to seven (7) hours a promise which was only fulfilled for about a week until the Utiily hit a brick wall interruptions of power imports during the period in question.
However, the reality of affairs is that the revised tarrifs have seen those consumers using upto 200kWh per month (R1 and R2) with some slight relief from reduced rates. For Lusaka setup, these are mainly households in areas like Chawama, Jack compoud, Chibolya, Kanyama that despite their heavy density, they individually have the minimal power demand and usually with a communal sourse of facilities like water supply.
However, for residentials such as Chalala, Makeni, Lilayi, Ibex Hill and the like with each individual yard bearing a borehole power demand, a critical analysis reviews that the nightmare starts for those using above 300kWh and beyond. In average cases, these are mostly occupied by businesses who by default are subjected to pay the hefty increased residential tarrifs of the R4, R5 and R6 consequently passing on the cost to consumers.
This recently revised tarrif will run from 1 February 2025 to 30 April 2025. The Electricity Act No. 11 of 2019 and subsections (1), (2) and (3) of Article 18, states: “Where the emergency is declared, the licensee shall submit the proposed tariff adjustment to the Energy Regulation Board for approval.” allows the Utility to revise tarrifs to meet its operational costs.
What is your take of the energy crisis presently in Zambia?
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