ZESCO hike not for all

Wed, 29 Mar 2017 12:31:02 +0000

By OSCAR MALIPENGA

DOMESTIC consumers will not be affected by the proposed 75% hike Parliament heard last evening.

Minister of Energy David Mabumba explained that to cushion low income customers the life tariff (R1) which was previously for 100 units has been increased to 300 units at the same tariff level.

He also told the House that ZESCO has proposed to effect a 75 percent increase in retail tariffs.

Mr Mabumba explained that an initial 50 percent increase will be effective 1st May 2017 and an additional 25 percent increase will be effective 1st September 2017.

Mr. Mabumba said ZESCO has since submitted an application to the Energy Regulation Board (ERB) to revise its retail electricity tariffs.

He said that ZESCO required an immediate increase in its tariffs in order to ensure that it continues to meet its operational and capital obligations.

Mr. Mabumba told the House in a ministerial statement that the current electricity tariffs in Zambia were not cost reflective for all customer categories.

“Therefore, there is need for current electricity tariffs to be gradually adjusted to cost reflective for all customers.

“The benefits will include among others the enhancement of security of supply through attraction of investment in power generation,” he said.

Mr. Mabumba said the tariffs would ensure that ZESCO had adequate revenues to continue purchasing the electricity shortfall from the local independent power producers (IPPs) as well as imports from the region.

“ZESCO has proposed to effect a 75 percent increase in retail tariffs as follows: an initial 50 percent increase effective 1st May 2017 and an additional 25 percent increase effective 1st September 2017.

“In order to cushion low income customers, the life tariff (R1) which was preciously for 100 units has been increased to 300 units at the same tariff level,” he said.

Mr. Mabumba said ZESCO has since submitted an application to the Energy Regulation Board (ERB) to revise its retail electricity tariffs.

He said ERB would undertake a public consultation process in order to receive consumers’ views on the proposed increase prior to making its final decision.

“In order to strengthen the electricity subsector regulatory environment, I intend to present two Bills before the House for ratification, namely the Electricity Bill, 2017, and the Energy

Regulation Bill, 2017.

“These Bills are intended to give the ERB greater oversight of the energy sector as well as create a consistent framework for tariff determination,” Mr. Mabumba said.

He added that the Bills would provide regulatory oversight of power supply agreements, bulk supply agreements and empower the ERB to review and determine tariffs for all electricity consumers, including mining customers.