Govt justifies exorbitant power tariff

LIVINGSTONE MARUFU

Zimbabwe has justified the approval of a 50% increase in electricity tariff to US$0.1221/kWh saying it was meant to ensure an uninterrupted supply to miners and industry.

The tariff was US$0.08/kWh

Reeling from serious power cuts, miners said the power threatens attainment of the US$12bn mining industry.

Mining houses also said high electricity costs are also weighing down their production.

But Zimbabwe Electricity Transmission and Distribution Company (ZETDC) managing director Howard Choga pleaded to the miners to accept the new tariff to achieve its targets.

“Electricity supply challenges are sitting on top of the challenges that the miners are facing. The mining industry believes that electricity charges are very expensive; they want them to be lowered from the current US$0.1221/kWh to US$0.1026/kWh.

“But the challenge is for us to find what is needed to correct the anomaly,” Choga said.

“What I can tell you is that we are behind in terms of refurbishment and rehabilitation of the network to the tune of about US$2bn.

“This is actually occasioned by the fact that for the past 20 years we have been operating below cost.”

He said the utility and the miners had the same discussions last year and the latter was arguing that the prices in the regions are different but the cost of electricity per country and its very difficult to compare from one country to another because of their general mix and technologies are different.

Choga said thermal electricity was more costly than hydro as is the case in Zambia where they use hydro and in South Africa they use thermal.

The impact of the non-cost reflective tariff is being felt across the region as you experience interruptions in power supplies, according to the ZETDC boss.

“We are being advised that even those mines with dedicated power supply are being affected because they have not paid enough attention to the network.

“As we talk  about the new tariff which is just beginning we should be grateful to the government because we have been speaking this language that every time you talk about tariff increase people would blame Zesa but the situation was that we were importing at about US$0.11/kWh and sell it at between US$0.06 and US$0.08/kWh.”

“I think if you see this number you know where we stand. I would say let’s accept the tariff for us to have a better future in Zimbabwe and achieve our targets,” Choga said.

This year’s demand was 1850MW against the supply of 1400MW with the imports chipping in for the difference.

This has triggered load shedding for the better part of this year with Zimbabwe failing to generate enough electricity and failing to pay for imports due to constrained cash flows.