By Helen Kadirire
Electricity tariff hikes will only be effected once the review of Zimbabwe Electricity Transmission and Distribution Company (ZETDC)’s supply capacity is completed, the energy industry regulator said.
Zimbabwe Energy Regulatory Authority (Zera) chief executive Gloria Magombo said power utilities must first prove they can sustainably and effectively supply electricity.|
This comes as Sadc Energy ministers have encouraged power utilities to have cost reflective tariffs by 2019.
ZETDC has applied for an upward review of electricity tariffs by 49 percent from the current 9.86cents/kWh to 14.69cents/kWh.
“Electricity tariff increases will only be considered subject to the effectiveness survey being conducted by ZETDC,” Magombo said.
Last year, Zera board chairperson, Ester Khosa, said the decision to retain the current tariffs was reached after extensive consultations with various stakeholders.
She said among some of the considerations was the need for utilities to improve efficiency levels, as well as implement cost-cutting measures.
“As a way forward, in terms of addressing the stakeholders’ concerns, Zera will be engaging an international consultant to examine the underlying cost structures of the utilities and recommend potential areas of cost savings and efficiency improvements. This is key to ensuring security of supply given the increased cost of supply due to changes in the energy mix. Furthermore, there is need to reprioritise new projects, improve revenue collection given the high levels of debt and reduce losses.”
“The engagement of a consultant is in line with Sections 4(b) and (g) of the Energy Regulatory Authority Act, which provides for the Authority’s mandate to create and promote an efficient energy industry as well as effective competition, respectively,” Khosa said.
The cost reflective tariff reflects the true cost of supplying power and removes reliance on government subsidies as is currently prevailing.
Countries in the region such as Botswana and Zambia have already approved tariff increases of 7,5 and 75 percent respectively, while South Africa is proposing a 20 percent hike for 2018. Daily News