News / National
Zesa drags customers to court
05 Jun 2016 at 11:18hrs | Views
POWER utility company Zesa has doubled the amount of money it is deducting towards settling outstanding debts when customers are buying pre-paid electricity, while it has engaged lawyers to force farmers and other debtors to clear their arrears within 14 days, failure of which they will be dragged to court.
The move has resulted in the cost of electricity going up as families are now forced to fork out more to buy the same amount of units they were buying with the same amount of money before the latest adjustments. After the latest increase which shows that the power utility company has increased the amount it was deducting to offset the debt from around 20 percent to 40 percent, an average of $5 can now buy only 28,8 kWh for one who owes the company compared to 33,1 kWh before the increase.
Although Zesa justified the increase, experts noted that the move will further burden consumers who are already reeling under economic pressures. It also comes after the Government "put on ice" the company's proposal to increase tariffs.
Zesa has applied to push power charges to 14,64 cents per kilowatt hour from 9,86/kWh this year but the Government put the proposal on hold, saying the parastatal should put in place measures to recover the $1 billion it is owed by its customers.
Zesa spokesperson Mr Fullard Gwasira confirmed the development which he said was meant to reduce debt payment periods for customers.
"The initial 20 percent rate has been increased over the years to 25 percent, 30 percent and 40 percent. The increase was meant to reduce the repayments periods that were stretching for up to 15 years depending on buying patterns. This is unsustainable as the cost of bank borrowing to cover operational cost is very high," he said.
The power company, through its lawyers, Chahambakwe, Mutizwa and Partners, has also dispatched letters to customers mainly farmers advising them to clear their outstanding arrears failure of which they will be dragged to court.
Sunday News is in possession of a copy of the letter addressed to a farmer in Matabeleland South which reads in part:
"We are informed by our client that you are indebted to it in the sum of $1 934, 28 in respect of power supplied to you as at February 2016 and that the amount is due, owing and payable. In the circumstances we have been instructed to demand as we hereby do payment of the above sum at our offices within fourteen (14) days from the date of this letter, failing which our instructions are to take legal action against you without further notice."
The letter also gave the farmers bank accounts to settle the due amount. Mr Gwasira also confirmed the legal route the power utility has taken to recover the debt.
"Legal action is being taken against all customer categories that have not been paying and clearing their monthly bills timely and have therefore accumulated large debt. All customer categories are being handed over to lawyers for debt collection," he said.
Industry and domestic customers owe approximately 16 percent and 32 percent respectively of the accumulated debt while the farming sector owes Zesa approximately seven percent of the total amount owed. Some farmers, majority of whom are in line for prosecution over the debt, have accused the power utility of levying them using commercial rates pertaining to industry.
"It is worrying that after agreeing on a payment plan, Zesa now turns and says they are taking us to court over a debt which in my case was never rectified as all along they have been charging me at commercial rates," said a farmer who requested anonymity.
However, Mr Gwasira refuted the claims saying, "there has been no debt that was calculated using commercial rates as there is a gazetted farming tariff in existence ever since. The calculations are correctly categorised."
He added that the arrears settlement would help capacitate the power utility to continue importing electricity and meet the country's daily demand for power.
"Power imports are being pre-paid for and we in turn need to collect debt and current bills to be able to meet the obligations. The power utility expects all customers receiving a service to pay for the service and the previous scenario where customers were not paying for the electricity consumed is draining the fiscus and incapacitating the utility," Mr Gwasira said.
Zimbabwe's daily peak demand for power is estimated at about 2 500MW against a 1 300 MW generation capacity.
Zimbabwe Electricity Transmission and Distribution Company (ZETDC) has been importing power from Zambia and South Africa as the power utility seeks to supplement its grids. The power company has also been working on the completion of Hwange and Kariba expansion projects which are expected to reduce importation of electricity once they are completed.
The move has resulted in the cost of electricity going up as families are now forced to fork out more to buy the same amount of units they were buying with the same amount of money before the latest adjustments. After the latest increase which shows that the power utility company has increased the amount it was deducting to offset the debt from around 20 percent to 40 percent, an average of $5 can now buy only 28,8 kWh for one who owes the company compared to 33,1 kWh before the increase.
Although Zesa justified the increase, experts noted that the move will further burden consumers who are already reeling under economic pressures. It also comes after the Government "put on ice" the company's proposal to increase tariffs.
Zesa has applied to push power charges to 14,64 cents per kilowatt hour from 9,86/kWh this year but the Government put the proposal on hold, saying the parastatal should put in place measures to recover the $1 billion it is owed by its customers.
Zesa spokesperson Mr Fullard Gwasira confirmed the development which he said was meant to reduce debt payment periods for customers.
"The initial 20 percent rate has been increased over the years to 25 percent, 30 percent and 40 percent. The increase was meant to reduce the repayments periods that were stretching for up to 15 years depending on buying patterns. This is unsustainable as the cost of bank borrowing to cover operational cost is very high," he said.
The power company, through its lawyers, Chahambakwe, Mutizwa and Partners, has also dispatched letters to customers mainly farmers advising them to clear their outstanding arrears failure of which they will be dragged to court.
Sunday News is in possession of a copy of the letter addressed to a farmer in Matabeleland South which reads in part:
"We are informed by our client that you are indebted to it in the sum of $1 934, 28 in respect of power supplied to you as at February 2016 and that the amount is due, owing and payable. In the circumstances we have been instructed to demand as we hereby do payment of the above sum at our offices within fourteen (14) days from the date of this letter, failing which our instructions are to take legal action against you without further notice."
The letter also gave the farmers bank accounts to settle the due amount. Mr Gwasira also confirmed the legal route the power utility has taken to recover the debt.
"Legal action is being taken against all customer categories that have not been paying and clearing their monthly bills timely and have therefore accumulated large debt. All customer categories are being handed over to lawyers for debt collection," he said.
Industry and domestic customers owe approximately 16 percent and 32 percent respectively of the accumulated debt while the farming sector owes Zesa approximately seven percent of the total amount owed. Some farmers, majority of whom are in line for prosecution over the debt, have accused the power utility of levying them using commercial rates pertaining to industry.
"It is worrying that after agreeing on a payment plan, Zesa now turns and says they are taking us to court over a debt which in my case was never rectified as all along they have been charging me at commercial rates," said a farmer who requested anonymity.
However, Mr Gwasira refuted the claims saying, "there has been no debt that was calculated using commercial rates as there is a gazetted farming tariff in existence ever since. The calculations are correctly categorised."
He added that the arrears settlement would help capacitate the power utility to continue importing electricity and meet the country's daily demand for power.
"Power imports are being pre-paid for and we in turn need to collect debt and current bills to be able to meet the obligations. The power utility expects all customers receiving a service to pay for the service and the previous scenario where customers were not paying for the electricity consumed is draining the fiscus and incapacitating the utility," Mr Gwasira said.
Zimbabwe's daily peak demand for power is estimated at about 2 500MW against a 1 300 MW generation capacity.
Zimbabwe Electricity Transmission and Distribution Company (ZETDC) has been importing power from Zambia and South Africa as the power utility seeks to supplement its grids. The power company has also been working on the completion of Hwange and Kariba expansion projects which are expected to reduce importation of electricity once they are completed.
Source - sundaynews
