ZESCO Emergence Tarrif Increase is Totally Unjustified
….ZESCO can find the $14million needed per month through other better and credible means…
Amb. Emmanuel Mwamba wrote;
This is what ZESCO must do…
ZESCO must immediately revise its bulk supplier and power purchase Agreements
● Emergency tariff hike is not justified.
● ZESCO was allocated water for electricity generation (in light of the drought and reduced rainfall) but kept on exporting huge quantities of power and now finished its allocation for the year by June 2024. Now Zambians have to pay for this carelessness and lack of planning?
● ZESCO continues to export power despite the critical deficit. Yet you want poor Zambians to bear the cost of such decisions?
● the real drain on ZESCO’s resources are the expensive and corrupt power purchase and bulk supplier agreements where ZESCO buys very very expensive power from independent power producers such as Maamba Collieries and Ndola Energy and sells it cheaply thereby perpetually yoked to this type of debt or where ZESCO sells power very very cheaply to bulk suppliers such as Copperbelt Energy Corporation which then mints millions in resale of the same power to the mines and other industrial users…but you want poor Zambians to bear the cost and pay for such corrupt contracts?
● ZESCO decommissioned off-grid industrial generation sets from Lundazi, Lukulu, Kabompo, Mwinilunga, and Zambezi districts when the districts where incoporated in the national grid. Where are these power plants?
● ZESCO regularly engages in wastage expenditure, dubious and expensive procurements, is highly overstaffed and its overhead and management costs are terribly high, insensitive to the state of the company.
ZESCO seeks to increase tariffs upto 156% as an emergency tariff to raise revenues amounting to about US$14 million monthly…
The Energy Regulations Board (ERB) has received an application from ZESCO
Limited for the approval of an emergency tariff adjustment for its Residential, Commercial and Maximum Demand customer categories.
Zambians must reject this carelessness and refuse to yield to this public extortion.
You better consult the technocrats.The water levels have gone down further.The 17 hours load shading may be adjusted further if the rains won’t start as early as September hence the notion of importing.Now if importation happens who must cover for the cost? The answer is obviously the consumer.If any thing ZESCO has been subsidizing for the consumers for a long time if we really look at the cost of power supply.Or we go for blackout Mr Mwamba Sir.Now if we go black then we are economically dead.When the water levels normalizes then we go back to better or reduced tariffs accepted.
Last week this man shared excerpts of a document that he failed to articulate let alone read.
I finally got a copy of the full document and listened and read what the Minister said during the announcement of the 17hrs loadshedding.
Here is what this Ambassador of lies didnt point out from that document
1. There is a legal basis on which Zesco is making this application. An SI of 18th April 2024 and Section 18 of the Electricity act of 2019. Pls read sections that referred documents points to.
2. This emergence application deals with 3 customer categories as the “BULK PURCHASE AGREEMENT” customers that Mr. Mwamba speaks of was dealt with in a separate application that ERB had already approved in April 2024. To which it would be helpful if he could refer to when making is arguement if it has any substance as we have already seen by the extent he is willing to mislead and lie.
The application relates to 3 groups and as I speak Zesco is sending Mass Short Messages to dispel Mwamba’s misinformation mill and clarifying its application so that its not misunderstood in its position.
Zesco and ERB in point outlines who the three customer categories are. The tariffs bands and charge. And would urge Zesco to carry out a mass information excerise to explain this portion of their application as well as section 4, which explains how they intend to use the increased emergency tariff increase to source power. How much they intend to purchase, and how it will be financed. Transparency doesnt get any better than this. What we as the public as to ensure that we comperhend coreectly by what of further explaination. Without sychopaths misinforming and misleading us.
4. As citizens its important that we understand what is feasible and practical and where real constraints exist. In the document US$14 million will be realised by Zesco from Customers in these three categories, US$ 37 million from the bulk Service Agreement Purchase Customers and US$ 17 million from Zesco.
What Mwamba should be asking where is Zesco getting this US$17 million? So we can appreciate why they are passing the cost to us. What are they realising from the power exports and how (I think they covering/subsiding us with the low tariffs and their other obligations). Its a known fact that Zesco produces and sells at a loss.
To mitigate these losses and continue providing us with power, service failities, pay for massive expansion projects; that when we have rain and water help meet the growing demand for power.
Its noted that while he suggests that the Bulk Purchase Service Agreement be terminated, what he doesnt address why PF failed to terminate these aggreements? They tried. They failed, As the also tried and we would be paying the price of the foolish attempts to terminate the ownership of KCM.
The naivetee of Mwamba is shocking and I keep reirerating that as a Journnalist; yours is to search for facts. Horn reseach skills and be logical. Facts will take you to the truth. If you start with a baised lookout. That baise will lead to a misconceived outlook.
I stand to be corrected by the little reading I do on power issues in Zambia lead to this.
This emergency. The contracts are written by smart lawyers that make them “Iron clad” and enforceable. This is regards to the bulk purchase service agreements. Similar, the export power agreements. We have to realise that when we start trying to flaut our agreements now, “when the shoe is on the other foot”, our neighbours who purchase the said power will feel they too can flaut the contracts we have with them. A situation that PF allowed to regain in the country with lawlessness. Ettiquette and decor is important in any civilised world.
We apprecIate divergent opinions but lets be objective factual in our discourse.
For Government, my submission is one. You have embarked and recieved donor support to mitigate the draught situation. 17hrs is a rather drastic time to be off supply, the capital required and the lag to impliment an alternative power source is something that you are fully aware of as you attempt to switch from the reliance on hydro. To ask SMEs and farmers is daunting given the capital market and their requirements. They too have said the funds availed have been quickly swiped when you have tried to avail them.
A two prong approach to add to the power the would be sourced during this period. A portion to finance climate mitigating finance source and an increase in 300MW source that this emergency tariff addresses. As given the information that Maamba and two other sources ofpower have gone off, this further stresses the demand deficit that Zesco has tp deal with.
Mr Mwamba can give people work and you start attending to his misinformation and false narratives.He is indeed ambassador of lies.But it is important to attend to his lies to help unsuspecting citizens from falling prey to his falsehood.People must rise to the occasion and dispell his falsehoods and fake news quickly before it’s too late.
All what I can say is that we have received this tariff increment proposal with mixed feelings. We know that politicians represent people and they wouldn’t want the people they represent to suffer. But ZESCO also is a service provider to the same people and wouldn’t want the people to suffer because both their business and domestic activities depend on power. So the best approach is to put politics aside so that politicians and ZESCO don’t antagonize each other. ZESCO is one company that has been abused for a long time by all the successive governments, I.e.MMD, PF and now UPND. MMD and PF governments have both exported power during their tenure, so they cannot blame UPND now. But here we are now, we have to face the reality, we have been hit by one of the worst droughts in living memory. So as we maneuverer around this challenge trying to find a solution or solutions, it’s better to look at the reason for tariff increment proposal than the effects on the people. As already alluded to, ZESCO has been abused for a long time and it doesn’t have the resources it needs to run effectively. It’s actually running with a huge debt, hence if the reason for increasing tariffs is to cushion or supplement the power expenses for power imports, then the intention is good and is worth looking at. Shooting it down like a Chinese spy balloon before critically looking at it may be a very grave mistake. By October, the little water that we still have at Kariba will be exhausted and people will not have power. But if ZESCO is allowed to increase the tariffs so that it continues providing the services through power imports, then let it be. At least people are much better to struggle with high tariffs and continue running their businesses than staying without power and close their businesses. You can imagine having low tariffs but no power, I am sure you are better off having high tariffs with power. Importing is always a very good idea but the problem with Zambia has been the tariffs themselves, they are too low, probably the lowest in the region. That’s why we don’t find many players in electricity like we see in oil marketing. For example under MMD, a Turkish ship exported power to Zambia from Mozambique on the the Indian Ocean. They were shocked when they saw our tariffs, they were just too low and the ship nearly went back. According to the little information I hear that time, the ship was demanding 17cents/kWh and us were charging 5cents/kWh, a difference of 12 cents. So these are some of the situations that ZESCO finds itself in, people want power and ZESCO can import that power but it has no adequate resources, what do we do? In my case, I would still settle on the increased tariffs so that power provision can continue. We just have to make them not high for the people but reasonable. Moreover I heard that those consuming less than 200 units/month will not be affected.