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.