ZEDTC Pushes For Electricity Tariff Hike To 15 Cents Per kWh
The Zimbabwe Electricity Transmission and Distribution Company (ZETDC) has bemoaned the sub-economic tariffs it is charging consumers saying they do not match its demands which include importing power from regional players.
Electricidade de Moçambique (EDM), Hidroeléctrica de Cahora Bassa (HCB), Zambia Electricity Supply Corporation (ZESCO), and Eskom from South Africa are Zimbabwe’s major suppliers of electricity.
According to ZETDC acting managing director, Howard Choga, the Zimbabwe Energy Regulation Authority (ZERA) approved a tariff of 10.63 cents per kWh.
He said the figure is being greatly depreciated when converted from the RTGS payments to US dollars to as low as 7 cents per kWh.
ZETDC is importing electricity at an average cost of 10.9 cents kWh but selling locally at 7 cents per kWh.
The power utility also purchases power from independent power producers (IPPs) at a weighted average cost of 8.6 cents per kWh while ZETDC sold at 7 cents.
Giving insights into ZETDC operations at a recent workshop held by ZERA, Choga said ZETDC now needs to charge 15 cents per kWh to be able to operate optimally. He said:
The weighted average cost of imports from EDM, HCB, ZESCO, and Eskom is 10.9 cents per kWh and the cost of internal purchases from Zimbabwe Power Company (ZPC) and Independent Power Producers have a weighted average cost of 8.6 cents per kWh but we are selling at 7 cents kWh.
Just buying at 10.96 cents and selling at 7 cents, without putting additional operational costs there, how do you think we survive, our cash flows are going south, I tell you we are surviving by not paying suppliers on time.
For many years we have been crying for a cost reflective tariff of 12.3 cents kWh but circumstances have changed especially due to borrowings that we have had to do because of the insufficiency of our cash flows, so the weighted cost of average capital has affected our tariff requirement to the extent that the tariff requirement in terms of cost reflectivity is now beyond 15 cents per kWh, that’s what we require to operate optimally.
According to Business Weekly, Zimbabwe’s projected demand for energy is likely to reach 2 350 megawatts by 2025.
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