Mining companies have own contracts for tariffs, ERB

Wed, 17 May 2017 10:45:17 +0000

By Prisca Lumingu-Banda

MINING companies have not been exempted from the 75 percent electricity tariff hike by ZESCO, They instead have special tariff agreements directly with Zesco that bars the Energy Regulation Board from interfering in the matter, consumer and public affairs director Agnes Phiri has said.

Ms Phiri said tariffs for the mining companies were governed by the bilateral agreements which fall under the power purchase agreements (PPAs) agreed upon outside the ERB tariffs plans.

She said PPAs have conditions under which the mining companies purchase power from Zesco and also how Zesco supplied the electricity to the industry.

“The position is that, and I hope people take it as official, the Energy Regulation Board has not excluded the mines, and the status is that the mining tariffs are governed by bilateral agreements under the PPAs, this is an agreement which Zesco goes into with a particular mine,” Ms Phiri said.

She said the mining tariffs currently in place were already agreed upon outside the regulatory process adding that the board was still working under the conditions of the contracts which were already in place.

“I think this is historical in the sense that in the past you would find that mines were coming in as investors and were negotiating with Government perspective and a tariff was agreed outside the regulatory process,” she said.

And Ms Phiri disclosed that one time ERB attempted to change the mining tariffs but that that action resulted into court action against regulator.

“In 2014, there was recognition that with the power purchase agreement, mining conglomerates would not pay for the quantity of power they consumed, but as ERB we wanted the mines to be paying what we felt were realistic tarrifs; that action landed ERB in court,” she said.

Ms Phiri said the regulator has already engaged the Government over the negotiations on what tariffs the mines should be paying, but that it was important for the members of the public to understand that ERB were aware that obviously the mines consumed more electricity than other industries, but also emphasised that the Government was fully engaged on the possibilities of charging the mines for the exact quantities of power they were using.