ERB proposes review of ZESCO, mines Power Purchasing Agreements

Mon, 30 Nov -0001 00:00:00 +0000

GOVERNMENT has embarked on an exercise which will give the Energy Regulation Board (ERB) power to review the electricity tariffs for the 25-year Power Purchasing Agreements (PPA) signed between the mines and Zesco, says Ministry of Energy director Oscar Kalumiana.

Mr Kalumiana said the exercise once completed would be taken to Parliament for ratification and then enacted into law.

He explained that the current law did not allow Government to adjust the electricity tariffs even if they were not cost reflective.

He was speaking when he appeared before the budgetary committee on implications of fuel, electricity and agricultural subsidies chaired by Mbala lawmaker Mwalimu Simfukwe.

“We have also embarked on a serious exercise to review our legislation. There is a consideration now that the law should be changed and give the ERB leeway to have a say on those agreements so that if it is not cost reflective, then the regulator can review that tariff regime.

“That is something that is being proposed and soon it will go to Parliament for ratification to help the sector and have sufficient electricity to power our economy,” he said.

Mr Kalumiana told the committee that Government was anxious to transfer mines to the private sector because they were a drain on the treasury as Ministry of Finance had to release funds to keep the mines running on a daily basis.

He explained that signing these PPA was one of the conditions the private sector had to buy the mines from the Government.

Mr Kalumiana said the privatisation programme in early 1990s started at a time when copper prices were at their lowest, hence the PPAs.

“Mines were not making money but only depended on the Government, that time one condition was about the electricity agreements. That has not favoured us now because in some cases the prices of copper have been high.

“We now need to take steps to ensure that these documents are opened up, for ERB to have power to review these prices. In 2014, ERB determined that tariffs should be increased for the mines but up to now it has not worked,” he said.