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Zimbabwe electricity tariffs up 19%

by Staff reporter
25 Oct 2023 at 06:34hrs | Views
The Zimbabwe Energy Regulatory Authority (ZERA) has approved a request by the Zimbabwe Electricity Transmission and Distribution Company (ZETDC) for a tariff increase of 2 US cents per kilowatt-hour, which represents an increase of just under 19 percent for residential consumers. However, discounts for residential users with low power demand will be retained.

For instance, the most common household consumption level of 250 kilowatt-hours per month will now cost US$31 at the interbank exchange rate on the day of purchase.

ZETDC has been grappling with rising operational costs due to reduced water flow from the Zambezi River, leading to tighter water rations by the Zambezi River Authority, resulting in lower power generation. Furthermore, the commissioning of two new 300MW units at the Hwange Thermal power plant has increased the reliance on thermal power generation, which is inherently more expensive than hydroelectric power. This is because thermal power requires coal mining, transportation, and combustion to generate steam to spin turbines, whereas hydroelectric power involves simply opening a valve to allow water to flow down a shaft to the turbines.

Additionally, ZETDC cited the need for increased revenue to replace worn, stolen, and vandalized transmission equipment, such as transformers.

In granting the tariff increase, ZERA emphasized the importance of ZETDC maximizing operational efficiency and promptly collecting all outstanding payments.

ZERA aims to transition all consumers to prepaid power systems, including major industrial and mining users, who currently pay in arrears. Prepaid meters are seen as a more efficient way to manage and bill power consumption.

The tariff approval process is governed by the Electricity Act, which requires ZETDC to obtain ZERA's approval for any tariff increases.

ZERA Chairperson Dr. David Madzikanda stated that the tariff increase was deemed necessary to improve service delivery and generate revenue for various purposes, including covering the costs of electricity purchase, operations, maintenance, research and development, regulatory expenses, and general administration.

He also emphasized the importance of improving revenue collection, reducing system losses, completing the prepaid metering program, installing smart meters, and transitioning medium and large power users to prepaid systems.

Dr. Madzikanda called on consumers to pay their bills in full and on time and assist in maintaining the electricity infrastructure. He also encouraged the media to educate the public about the importance of maintaining the infrastructure.

While the tariff increase represents a 19 percent jump in costs for residential consumers, the percentage increases vary depending on the consumer category and tariff structure. The revenue generated from this increase will enable ZETDC to address maintenance issues, improve power reliability, and procure necessary equipment.

It is anticipated that ZETDC will need to enhance its operational efficiency to ensure that consumers benefit from the tariff adjustment.

Source - The Herald