ERB approves ZESCO’s emergency tariff increase for three months effective 1st November, 2024

APPROVED EMERGENCY TARIFFS TO BE EFFECTIVE FOR 3 MONTHS – ERB

By ZR Reporter

The Energy Regulation Board (ERB) has directed that the approved emergency tariffs should be effective for three months from 1st November 2024 το 31 January 2025, after which the Board will re-evaluate the Emergency situation and grant a renewal, if necessary.

The Board has also directed that ZESCO should explore sourcing extra revenue from other sources and other financially prudent options for power imports.

It has also directed ZESCO to prioritize local power purchases provided it is cost effective when compared with Southern Africa Power Pool (SAPP) and other sources.

ERB has also directed ZESCO to adhere to the published load management schedule as communicated to the consumers and ensure a maximum of 17 hours of load shedding.

It has demanded demanded in the event that the Utility experiences challenges in adhering to the load shedding schedules, the ERB and the public must be notified immediately using real time methods.

The Board has told the power Utility company to heighten sensitisation of the public on the emergency power situation and emergency tariff and provide information on energy efficiency measures and provide weekly updates to the ERB, providing evidence that revenue raised from the emergency tariffs is spent solely on the purchase of emergency power.

ZESCO has also been directed to report on actual exports and energy imports from Eskom, EDM, ZPC and any other sources, as the case may be, and any technical challenges including transmission bottlenecks, as they arise.

The ERB has also directed
ZESCO to ensure that it adheres to the Board’s key performance indicators.

ZESCO is expected to within 30 days submit a report showing the implementation of short term, medium term and long term measures to enhance efficiency.

This came to light today after ERB Chairperson James Banda announced the approval of ZESCO’s application for emergency tariffs during the emergency period.

Mr Banda said the approval is aimed at ensuring that there is tariff affordability.

He explained that in the application, ZESCO proposed to reduce the tariffs for residential R1, R2 and commercial Cl customers.

“This will provide relief for low- Income households and Small and Medium Enterprises (SMEs.) In addition, these proposed reductions will also ensure that tariffs are affordable to this category of consumers. This measure will also assist in alleviating any huge financial impact that would arise from the increased tariffs,” he said.

“Similarly, the proposed adjustments on the MDs are necessary to enable ZESCO import sufficient power for the industries to ensure that these productive sectors remain sustainable during the Emergency period. The proposal by ZESCO to eliminate capacity charge and to adopt an all-energy tariff for the MD customers will also provide the necessary relief to this segment of consumers.”

Mr Banda said the impact on Load Shedding is the other reason for the approval.

“It was noted that the power deficit has increased from 900MW το 1,300MW, increasing the hours of load shedding from 17 hours to 21 hours,” he said.

“This has meant that the already struggling businesses experienced a reduction in their revenues due to the increased power rationing which subsequently affected their productivity. In this application, ZESCO committed to reducing hours of Load shedding and publishing predictable load shedding schedules. This reduction will provide relief to households and businesses. Additionally, it was submitted by businesses during the public hearings that the cost of running diesel generators is way above the proposed tariff adjustment.”

ZESCO’s financial performance and its viability is also among the reasons for the approval.

He said the financial review indicated that the utility does not have adequate resources to finance the additional power Imports.

“Therefore, there is need to support the Utility to raise the required funds to meet its funding gap for urgent Importation of additional power aimed at alleviating the loadshedding situation,” he said.