Court News

Minister’s CEC decision quashed

By GRACE CHAILE-LESOETSA

THE Lusaka High Court has quashed Minister of Energy Mathew Nkhuwa ‘s decision to declare Copperbelt Energy Corporation (CEC)’s  transmission and distribution lines as a common carrier.

 Judge Elita Mwikisa in her judgement dated February 26, 2021 said that the Minister’s decisions were illegal and tainted with procedural impropriety.

The judge however said that she did not find evidence of bad faith or improper motives in Mr Nkhuwa’s  actions due to the fact that there was an impending crisis looming that would have led Konkola Copper Mines  not to have power supply as submitted by the State, especially that section 13 (d) of the agreement  emphasises the need of uninterrupted power supply to the Mine and the giving of 14 days’ notice.

Ms Justice Mwikisa said KCM had the obligation to pay its debt to CEC failure  to which CEC had the right to discontinue power supply  to KCM.

“ Unless  it’s repealed, section 15 will remain what it is, and any attempt to negotiate the terms between the applicant and any enterprise that wishes to use the applicant’s network, will be in violation of S.I no. 57 of 2020,”

“All in all, I find that the applicant has succeeded on all grounds under Order 53 rule 3 of the rules of the Supreme Court. I accordingly quash the decision of the Minister of 29th May, 2020, to declare the applicant’s transmission and distribution lines as a common carrier,” she ruled.

 CEC has cited the Attorney General and the Energy Regulation Board (ERB) in the matter in which it was seeking judicial review challenging the decision by the Minister to declare its transmission and distribution lines as common carrier to be used on the terms and conditions determined by ERB. CEC also challenged the decision by ERB which set the wheeling tariff before the parties negotiate terms of use.

CEC challenged Mr Nkhuwa and ERB’s position on grounds that it is illegal, procedurally improper and the motive is in bad faith.

It said under Section 15(2) of the Electricity Act once a minister declares a transmission and distribution line as a common carrier, the terms and conditions of use ought to be agreed on between the owner of the transmission and distribution lines and any enterprise that intends to use the said lines. CEC stated that the matter is only referred to the ERB in the event of default in agreement between the owner and the enterprise.

It stated that the illegality spins around the distinction between a distribution and transmission network as enshrined in the Electricity Act.

CEC said it had numerous transmission and distribution lines dedicated to many customers on the Copperbelt and Democratic Republic of Congo therefore Mr Nkhuwa ought to have specified which transmission and distribution lines he had declared as common carriers out of the lines owned by CEC.

It also argued that the ERB cannot set the wheeling tariff before the parties negotiate terms of use and fail to agree.

CEC argued that ERB’s role can be described as a ‘default role’ which only comes into play when the parties have failed to reach an agreement.

“In this case however ERB determined the wheeling tariff on the interim basis CEC and ZESCO had engaged in discussions over the same. No provision under the Electricity Act allows ERB to do what it did,” CEC stated.

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