By Agness Changala-Katongo
Copperbelt Energy Corporation (CEC) has applied for leave in the Lusaka High Court to commence judicial review proceedings against Energy minister Mathew Nkhuwa’s decision to declare it’s transmission and distribution lines as common carriers.
The energy company stated that if leave was granted, a direction that such grant should operate as a stay of the decision of further proceedings to which this application relates until the determination of the case.
Last week, the government declared CEC transmission and distribution lines as common carrier after Nkhuwa signed SI No 57 of 2020.
CEC has since sought an order to quash the above decision and a further order to stop Nkhuwa from enforcing SI 57.
According to a notice of application for leave to apply for judicial review, filed in the principal registry, CEC is seeking to challenge Energy Regulation Board (ERB)’s decision of May 31, 2020 to direct it to charge wheeling tariff of US$5,84/kw/month.
The energy company has cited the Attorney General and ERB, seeking a declaration that the minister’s decision to declare its transmission and distribution lines as common carrier was unlawful.
The corporation is also seeking a declaration that Nkhuwa’s decision to provide a wheeling path for Zesco Limited to supply power to KCM or terms dictated by ERB was illegal and therefore, now and void.
It further wants the court to declare that Nkhuwa’s decision to issue Statutory Instrument No57 of 2020 was illegal.
Further, CEC wants the court to direct that the decision by ERB director general that it charges a wheeling tariff of US5, 84/kw/month was illegal and therefore null and void.
CEC stated that it had a contract with Zesco for the supply and purchase of power, the bulk supply agreement (BSA) entered into on November 21,1997 and expired on March 31,2020 following an extension of its original tenure of 15 to 20 years.
It stated that it had been the main supplier of power to the mines on the Copperbelt, consequently to which it had entered into various existing long term power supply agreements including that which KCM whose term expired on March 31, 2020 but was extended to May 31,2020 by consent of the parties.
It stated that on March 31 this year, Nkhuwa announced that he had decided to impose “unilateral” and non negotiable terms for an interim arrangement between CEC and Zesco, terms the CEC did not accept.
CEC stated that Zesco had non the less made attempts to enforce these unilateral terms and communicated its position in various correspondents.
The energy company stated that the power supply agreement issued between CEC and Zesco continued to be unsettled, and another matter arose following CEC’s attempts to recover a debt in excess of Us$144million owed to it by KCM.
The applicant stated that it had thus rooted in the power supply agreement between CEC and KCM, a private entity now under the control and direction of the government though its appointed liquidator.
CEC explained that the BSA expired on March 30 this year but it’s terms were extended to May 31, by a letter of intent dated
April 17, 2020.
It stated that KCM as a customer of CEC was under a duty to pay its electricity bills for power supply received from the applicant and the applicant was legally entitled to suspend supply of electricity to the mine whenever KCM defaults in its duty to settle the bills.
“As at 31 May, 2020, KCM owes the applicant US$144million cumulatively for a period of 12 months, the amount continues to increase,” CEC revealed.
And CEC stated that KCM did not dispute its indebtedness and consequently, entered into a Supplimental Agreement to the power supply agreement dated July 18, 2019 in which KCM undertook to liquidate its indebtedness to the applicant but has since defaulted.
CEC stated that on May 28, this year, Nkhuwa wrote to CEC asking them to give wheeling path to Zesco to supply power to KCM and it was at this point that the applicant realized the customer Zesco was referring to was in fact KCM.
CEC insisted that it would restrict power supply to KCM since power supply agreement with KCM had expired and because KCM was indebted to CEC and did not seem interested to settle its debt.
The corporation stated that Nkhuwa however, on May 29, 2020 declared its transmission and distribution lines ad common carrier, a declaration which was intended to facilitate transmission of power from Zesco to KCM using CEC infrastructure.
The applicant stated that following Nkhuwa’s directive, CEC had continued to supply KCM with power despite there being no power supply agreement and despite the mines indebtedness to CEC in excess of US$144million.
It stated that the minister’s decision to declare its transmission and distribution lines as a common carrier via SI no. 57 of 2020 was ultra vires section 15 of the Electricity Act .