ZERA rejects power tariff increase



The Zimbabwe Energy Regulatory Authority (ZERA) has rejected proposals by the Zimbabwe Electricity Supply Authority for a 49% power tariff increase and maintained the average cost at $9.86c/kWh for the year.

ZERA board chairperson Esther Khosa told a press conference in Harare that ZERA has made a determination to retain the average tariff at $9.86c/kWh for the year 2016 on the back of current national economic issues and concerns of stakeholder.

“After  duly considering   the tariff application ,the written and oral submissions form  various consumer  groups  and stakeholders as well as facts  and evidence provided by  ZETDC, the ZERA Board on  14 July  2016  made  a   determination that the current tariff of 9.86c/kWh be retained for year 2016,” she said.

ZEDTC’s application was for a 49% upward review of the electricity tariff from the current level of $9.86c/kWh corresponding to a revenue requirement of $1,218 bln for the supply of 8 296 GWh of electricity.

Khosa said in coming up with the decision to retain the current tariff levels a number of parameters were considered which include the performance of the economy in 2015 and 2016 and the current efforts of government to improve the ease of doing business.

“ There is need to support government  in reducing  the cost of doing business , the need for utilities to improve efficiency  levels as well as  implement cost cutting  measures  and views  and concerns  from  various stakeholders consulted during  stakeholder meetings,” she said.

She said  in terms of addressing  the stakeholders concerns ,ZERA  will be engaging  an international  consultant  to examine  the underlying   costs structures  of the utilities  and recommend  potential  areas of cost  savings and efficiency   improvements.

“This is key to ensuring   sustainability   given the increased costs of supply   due to changes in the energy mix. Furthermore, there is need to reprioritize new projects, improve revenue collection given the high levels of debt and reduce losses,” she said.

Khosa said the engagement   is in line with sections 4 (b)  and (g)  of the energy  regulatory  authority act which provide for   the authorities  mandate to  create  and promote  an efficient  energy  industry as well as  effective competition  respectively.

Zesa Holdings had applied for a $14.69 /kWh to help finance imports to mitigate power shortages and expanding generation capacity.

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