By BUUMBA CHIMBULU
KONKOLA Copper Mine (KCM) is an important power customer given that it is directly connected to the power network at multiple points, the Copperbelt Energy Corporation (CEC) said.
“This means that even if KCM signs a Power Supply Agreement (PSA) with another provider, KCM will still require transmission and connection services from CEC.
“Like any other customer, KCM cannot exist on the CEC network without a form of connection services agreement with the company,” CEC said in its corporate news to investors.
The power firm said it remained open to working with KCM and other parties that may enter into the required transmission and connection agreements should need arise.
CEC will continue to meet core mandate of providing all transmission and connection services at the best quality possible, CEC also informed its investors that it would, effective June 1, 2020, discontinue the supply of power to KCM as PSA between the two companies came to an end on March 31, 2020 but was extended through mutual agreement of the parties, up to May 31, 2020.
It said negotiations for its further extension have broken down, despite CEC’s best efforts in good faith towards securing a new contract and engaging in comprehensive and cooperative negotiations.
“In trying to agree the new contract with KCM, CEC sought to resolve KCM’s outstanding debt of US$132 million as well as obtain a firm commitment from KCM regarding the timely payment of electricity charges going forward.
“These costs continue to increase – it is CEC’s expectation that KCM’s debt to CEC will grow to at least USD144 million as at 31 May 2020,” CEC said.
But Government has declared CEC transmission and distribution lines as common carrier of electricity, which means that any other entity could utilise the lines to transmit power to their customers and only pay a wheeling fee.
Energy Minister, Matthew Nkhuwa, signed statutory instrument number 57 of 2020 under the Electricity Act number 11 of 2019, which obliges Zesco to use CEC lines to transmit power to KCM by paying wheeling fee.
By BUUMBA CHIMBULU