Zimbabwe Electricity Tariff Increase Application Raises Questions About Reliability.
The Zimbabwe Electricity Transmission and Distribution Company (ZETDC) has applied for a significant increase in electricity tariffs for 2023, setting off a wave of debate and concern among consumers and analysts alike. The proposed increase of US2 cents per kilowatt-hour (kWh) is stated to be crucial for maintaining stable power supplies and supporting economic growth.
The current Zesa electricity tariffs stand at a minimum of $137 per kWh, and the proposed increase would take it to approximately $147 in local currency. ZETDC claims that the additional revenue generated from this tariff adjustment will be allocated to various projects, including the rehabilitation and maintenance of the transmission and distribution network, servicing of loans for specific power units, and refurbishing older units.
In a public notice, ZETDC cited compliance with the Electricity Act (Chapter 13:19) of 2002 as the basis for their tariff review application. They listed reasons for seeking the increase, including covering the costs of purchasing electricity, operations, maintenance, regulatory expenses, research and development, and general administration. Moreover, the increase is purportedly intended to create the capacity to support economic growth in multiple sectors.
One of the key promises made by ZETDC is the improvement of revenue collection and reduction of system losses through various measures. These measures include the completion of a prepaid metering program, installation of smart meters, migration of medium and large power users to prepayment, and the completion of statistical metering for load balancing.
However, the proposal has raised concerns, particularly in light of comparisons with neighboring countries. A quick survey of electricity tariffs in the Southern African region reveals that ZETDC currently has one of the lowest charges, with tariffs in South Africa, Namibia, Mozambique, Madagascar, Mauritius, Malawi, Eswatini, Botswana, Zambia, Tanzania, and Seychelles significantly higher.
Zimbabweans have experienced fluctuations in power availability, from enjoying consistent power following the commissioning of new generators to recently witnessing a return of load shedding. This erratic power supply is partly attributed to issues such as ZETDC’s debt from the purchase of electricity and reduced generation at power stations due to factors like low dam levels.
Analysts argue that while a tariff increase may be necessary to address the power crisis and ensure the capacity to purchase power locally and from neighboring countries, the real issue lies in the utility’s financial stability and efficient operation.
As this situation unfolds, stakeholders, including consumers, will closely monitor the proceedings and await a decision from the Zimbabwe Energy Regulatory Authority (ZERA) regarding the tariff increase application. The outcome of this application will undoubtedly have far-reaching implications for Zimbabwe’s energy landscape and its economic development prospects.- Agencies