Power tariff hike mulled

GOVERNMENT is mulling an upward review in electricity tariffs among a cocktail of measures aimed at improving operations at the national power utility, Zesa Holdings.

Zimbabwe Electricity Supply Authority workers working on a new electricity line to Chitekete business centre last week - Picture by Kudakwashe Hunda — Zimbabwe Electricity Supply Authority workers working on a new electricity line to Chitekete business centre last week – Picture by Kudakwashe Hunda

The move is also in line with SADC’s 2016 cost plus pricing model, a strategy designed to improve the region’s energy supply.

Under the model the selling price of electricity is determined by adding a percentage mark up to a product’s unit price.

The permanent secretary in the Ministry of Energy and Power Development Mr Partson Mbirimi notes that the current electricity tariffs are uncompetitive and make it impossible for Zesa to break even.

The average cost of producing electricity is 14cents/KWH but Zesa sales it at nine cents with Government funding the five cents disparity.

“There should be no subsidies on electricity or telecommunications, ZESA must make money and get out of that pit (loss making position). In the next three to five years, ZESA should transform into a viable company,” Mr Mbiriri told a Zimbabwe Regulatory Authority (ZERA) workshop in Harare on Tuesday.