ZESCO’s application to ERB to increase tarrifs by 37% Unacceptable, Against Govt Approval
By Amb. Emmanuel Mwamba
Taking energy solutions directly to the people could be an immediate solution.
To reduce the cost of renewable energy.
Removing taxes on solar power pannels, energy-saving lights and batteries and promoting other energy-efficient products like cooking gas is the fastest way to resolving the energy crisis facing majority households stressed by high cost of living, lack of jobs and poverty.
In Kenya, President William Ruto has pledged to susbsidise the delivery of cooking gas and gas stoves to households in the next 3 years.
This is anoble commitment and I hope the Kenyan President will pursue and fulfil the pledge.
I have noted that ZESCO has applied to the Energy Regulations Board (ERB) and proposed a 37-percent tariff increment ina bid to attract more investments in power generation and distribution.
Now this is contrary to recent approvals by Cabinet.
The 2021 Electricity Sector Cost of Service study (COSS) commenced in December 2019 which was undertaken by the Energy Market and Regulatory Consultants (EMRC) of the United Kingdom, an independent consultant, with financing from the African Development Bank (AfDB) at the cost of US $ 592,000,
determined the revenue requirement for ZESCO.
It proposed an increase based on marginal revenue for a 5-year period.
ZESCO’s current revenue requirements
ranges was around US $1.2 billion to US $1.4 billion annually.
Maintaining the current tariffs will not yield the desired revenue requirements.
Therefore, the study determined that economic tariffs should be increased by an average of 17 percent over the next five years.
Government Green Paper on the findings and recommendations approved the average tarrif increament of an average of 17% over a period of five years.
So how can ZESCO apply for an increament of 37%! When the study proposed for a 17% increment spread over a period of five years? What has changed? Is it the recent commitments made to commercial companies willing to invest in the sector?
You cannot milk a stone simply because you want citizens to fund investors’ commercial projects that want expensive power pruchase agreements!
We are already suffering from similar power purchase agreements with independent power producers whereby ZESCO committed to buying power at 14-18cents per kilowatt while selling it to citizens and industry at a perpertual loss of 3-6 cents per kilowatt. ZESCO has been forced to be in a spiral of unending debt.
We shall oppose the 37-percent tariff increment and ensure that ZESCO sticks to approved parameters.