CZI contests Zesa tariffs

September 2011 tariff increase.
Zesa raised its rates by an average 31 percent to US8,93c, arguing that Zimbabwe’s electricity charges were the lowest in the Southern Africa region.
The power utility even proposed an additional 47 percent increase.
The case was heard last week with all parties agreeing that due process was not followed in setting the existing tariff, thus making the tariff illegal. The court is yet to make a ruling on the matter.
In presenting the CZI argument, their legal representative said in accordance with the Electricity Act, tariffs are set and approved by the commission.
But at that time, the commission was not in place. Therefore, the tariff increases were misleading as it purported that the commission was in existence.
The CZI lawyer argued the fact that the tariff was not fixed by the commission made it illegal.
The CZI representative sought for the offending tariffs to be set aside. The Zera lawyer also admitted that the tariff setting was not done in a proper way and the arguments as raised by the industry lobby group were not objectionable. But the Zera lawyer noted that the order being sought — setting the tariff aside — while not condoning what transpired on September 1, 2011, granting the order as requested would be disastrous, not only to industry but to the whole country.
If such an order was granted, then Zesa would be left bankrupt as clients would claim refunds.
Zera then proposed what it called “a better way” of dealing with the matter. The process has already started through the cost of supply study with a view to correcting the effects and setting the tariffs in a proper manner.
The Zera lawyer argued that this was the most pragmatic way (to settle the matter), given the effects of the order being sought by CZI.
In the meantime, the tariff remains in force.
Asked by the court as to how long the process would take, the Zera lawyer said in terms of the Act, the process was lengthy — three months would be enough.
The court assessor then asked what would happen to the tariff currently in place which Zera admitted was illegal during the three months period.
“What if the cost of supply study recommended an even higher tariff?” he asked.
In response, the Zera lawyer said it was illegal, but proposed the current tariff structure to remain in place “to avoid chaos”. The Zera legal representative argued that to go back to the tariff prior to September 2011 would also be embracing another illegal tariff which was set in August 2009. The August 2009 tariff was set by the then acting Minister of Finance Patrick Chinamasa and due process was not followed. The CZI lawyer told the court that Zera and Zesa were “simply crying for clemency”.
He said that the court did not have the jurisdiction from the mandatory provisions of the law to endorse an illegality as the rule of law would collapse. He said the reason for the existence of the court and other courts would collapse if the law was not upheld.
Furthermore, he said, the citizens of the country looked to the courts to seek redress on illegalities such as the one before the court.
On the August 2009 tariff, the lawyer argued that, it was highly unlikely that the 2009 tariffs could be challenged, given the time lapse.
On the issue of the chaos likely to be caused by setting aside the current tariff, the CZI lawyer argued that this was a “non-issue” as the tariff prior to September 2011,  managed to sustain Zesa for two years.