Why is the 75% electricity tariff hike not cushioning load-shedding ?

Why is the 75% electricity tariff hike not cushioning load-shedding ?

 

In May 2017, Zesco implemented a 75% electricity  tariff hike.

The tariffs for ZESCO’s retail customers were increased by a total of 75%, and was effected in two phases of 50% effective 15th May, 2017 and 25% was effected on 1st September 2017.

These tariffs are in and continue to be in force today.

The PF regime through the Energy Regulation Board and Zesco stated that the reasons for increasing the cost of electricity included;

1. The depreciation of the Kwacha; high Interest Rates; and the rising costs in its operations that had adversely affected ZESCO;

2. To mitigate the power deficit, ZESCO had signed Power Purchase Agreements (PPAs) with Independent Power Producers (IPPs) at tariffs higher than the existing averages;

3. The tariff application is intended to attract a multi-Billion US Dollar portfolio of generation projects which are important to diversify the generation mix to avoid the devastating effects of drought that had recently being experienced. This would greatly improve the security of supply in the medium to long term; and

4. To allow ZESCO to continue to import power from the region in order to meet the power deficit caused by drought.

Point 3 and 4 are very critical because, since that time, Zesco had been charging customers these higher rates. It means that Zesco has been generating money to ‘continue to import power to meet the power deficit caused by drought’. It also means that, with this money, Zesco has or should have by now acquired the generation mix talked about in point 3 above.

Simply put, the money being generated from the 75% electricity tariff increments was meant to ensure that there should be no load shedding whether there is a drought in Zambia or not. That is what they told us. That was the core justification . Now why is it that a year later, load-shedding has increased by more than 75% instead of reducing? To blame the low water level at the Kariba dam is to insult the intelligence of Zambians who were forced to pay higher tariffs on the pretext that load shedding will be history whether the Kariba dam is full or dry.

Besides, Zambia is not the only country that was affected by drought in 2018/2019. Almost all the countries in the region were. Botswana and Namibia even declared the droughts national disasters. But is there crippling load-shedding in these countries?

Zesco, where is our money ?

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