Zambia's Power Utility, ZESCO, Seeks 156% Emergency Electricity Tariff Increase
Zambia’s energy regulator, the Energy Regulation Board (ERB), is considering an application from the state-owned power utility, ZESCO, to increase electricity tariffs by as much as 156 per cent as an emergency measure to cover drought-induced losses.
ZESCO is seeking to raise US$14 million from retail electricity users.
In its application for the increase, ZESCO said it faces losses of around US$51 million monthly to cover the costs of emergency power supplies, including imports and hiring expensive diesel generator sets.
The power utility proposed that the emergency tariffs apply for 9 months.
In a statement issued on 19 August 2024, ERB Public Relations Manager, Namukolo Kasumpa, said that they will hold a public consultation meeting regarding the emergency tariff application on August 21. She said:
The Energy Regulation Board (ERB), on 12th April 2024, through Gazette Notice and in accordance with Section 18 of the Electricity Act No. 11 of 2019, declared an emergency with respect to ZESCO Limited’s (ZESCO) inability to meet the national electricity demand due to external factors beyond the control of the Utility.
Subsequent to the declaration of emergency, the ERB received an application from ZESCO for the approval of an emergency tariff adjustment for its Residential, Commercial and Maximum Demand customer categories.
The ERB on 16th August 2024, issued a Public Notice and Consultation Paper (PCP) to the public in the interest of best regulatory practice and in keeping with the ERB’s mission to be responsive to stakeholders’ needs.
This has been done to ensure transparency regarding the emergency situation and the efforts to manage the energy crisis.
Specifically, the PCP seeks to solicit input and views from interested and affected parties to achieve a fair balance among the interests of customers (end-users), the licensee (ZESCO) and the public at large.
The input will be considered and form part of the decision-making process of the Board of Directors of the ERB.
In its application, ZESCO has proposed maintaining the tariff for domestic consumers using 200 units or less.
To support low-income households and small businesses, the utility also recommended reducing the tariff for consumers in the CI range, which caters to small and medium-sized enterprises (SMEs), during the emergency period.
ZESCO indicated that these measures aim to promote energy efficiency among affected consumers.
A hearing on this matter is scheduled for Wednesday, August 21, 2024, at the Mulungushi Conference Center in Lusaka.
Zambia, like its southern neighbour Zimbabwe, heavily relies on the Kariba Dam—the world’s largest man-made freshwater reservoir—for power generation.
However, a severe drought during the 2023/24 rainy season, regarded as the worst in 40 years, has left water levels in the dam critically low ahead of the rainy season, which typically begins in November and starts replenishing the reservoir by February.
On Monday, August 19, the Zambezi River Authority (ZRA) reported that Kariba’s usable live storage, or the water available for power generation, had dwindled to just 9.46%.
As a result, ZESCO has announced plans to increase rolling blackouts across residential areas to 17 hours per day.
The Zimbabwe Power Company (ZPC) is currently generating only 215 MW from the Kariba South Hydro Power Station, despite an installed capacity of 1,050 MW.
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