Electricity charges up 50 percent

By Oliver Kazunga

Consumers will pay 50 percent more for power usage after the Zimbabwe Electricity Transmission and Distribution Company (ZETDC) raised power tariffs by that margin with effect from Wednesday.

In a notice of 2020 electricity tariff indexation, the power company, a subsidiary of Zesa Holdings, said yesterday that the power tariff will be reviewed on a monthly basis in line with inflationary trends.

The new charges reflect the electricity tariff s on the prepaid system excluding the fixed monthly charges, as well as the Rural Electrification Levy of six per cent. The upward review comes at a time when there have been concerns within the utility that delays in reviewing electricity tariffs to be cost reflective would leave Zesa in a huge debt with the risk of bringing back power cuts as operations weaken.

However, consumers are likely to cry foul given the low disposable incomes against the high cost of living, which has been pegged at $17 200 a month for a family of five, as at August 2020, according to ZimStat.

“ZETDC has adjusted the electricity tariff s by 50 percent. This is in accordance with the Tariff Award of 2 October 2019, which approved implementation of the monthly tariff indexation formula for changes above 10 percent,” reads part of the notice.

The upward review means that the first 50 units of electricity for the month, which used to cost $24,50 will now cost $37. This follows the increase in the electricity tariff of the first 50 units from $0,49 (49 cents) per kWh to $0,74 (74 cents) per kWh. The next 150 units, which used to cost $162,50 now cost $243.

The lifeline of 200 units of electricity now cost $280 up from $186. For 300 units and above, consumers will now go for a punitive $6,92 per kWh compared to $4,61 per kWh previously.

“The rates are exclusive of the six percent Rural Electrification Levy and 14,5 percent VAT (Value Added Tax),” said the utility.

“In terms of Statutory Instrument 168 of 2012, electricity charges for domestic customers are zero rated for VAT and in terms of Statutory Instrument 215 of 2005, fixed charges on commercial and domestic electricity are zero rated for VAT.”

ZETDC urged maximum demand (MD) customers to utilise more of the off-peak periods.

“For a customer who attains MD during off peak, the applicable MD is the one attained during the peak or standard period.

“Reactive energy charge shall be applied to any reactive energy in excess of 48 percent (power factor less than 0,90) of the active power recorded (kWh) during a billing period,” it said.

ZETDC made a 320 percent electricity tariff increase last October to 162,16 cents per kilowatt hour (kWh) in March this year as a way to help the power utility improve electricity supply.

Suppliers of coal have threatened to stop supplies owing to incapacitation caused by the Zimbabwe Power Company (ZPC).

Last year, the Government took the decision to implement a tariff indexation formula that would align Zesa tariffs to movements caused by inflation and the exchange rate.

The decision was aimed at obtaining cost reflectivity in the supply of electricity and maintenance of value tariffs to ensure viability and sustainability of the power supply utility. The Chronicle