Zesa Holdings, industry head for showdown

After recent negotiations between Zesa and industry failed to yield positive results, the latter is now threatening legal action against the power utility.
Some companies will end up forking out as much as US$6,5 million annually on electricity bills if they enter into the deal.
Per kilowat hour is a unit measure of flow of electricity mainly used to levy power to consumers.
Lafarge Cement Zimbabwe Limited managing director, Mr Jonathan Shonhiwa, on Monday confirmed Zesa had threatened the company with massive load shedding if it did not sign the special deal.
“Zesa has given us a notice of load shedding of between five to 14 hours a day. It’s either we enter into the higher 13cents per kilowatt an hour tariff deal or we suffer serious load shedding,” Mr Shonhiwa said.
He said signing such a deal could result in the price of cement skyrocketing or trigger shortages.
“A massive cement shortage is looming if we are going to have load shedding of between five to 14 hours or there would be huge price increases if we sign a deal with Zesa for uninterrupted electricity supply. Our electricity bill will shoot to around US$6,5 million per annum if we enter into such a deal. We are facing two evils and both are not good at all,” Mr Shonhiwa said.
He, however, declined to disclose how much the firm was paying for power.
Power charges rose by 31 percent yesterday to an average of 9.83 US cents a unit after the Government finally accepted a decision by the Zimbabwe Electricity Regulatory Commission. Before the increase, the charges have been 7.53 US cents per kilowatt an hour and industry argues that the 13 cents per kilowatt an hour will affect their businesses.

The Confederation of Zimbabwe Industries yesterday alleged Zesa was “arm-twisting” companies to enter into the “higher tariff for uninterrupted electricity deal.”
CZI president Mr Joseph Kanyekanye described the move as unethical and scandalous.
“They (Zesa) are actually going to companies and indicating that if they want uninterrupted power supply, they should pay 13c per kilowatt an hour. They will put you under pressure and you will end up signing the deal. They are arm-twisting everyone. This is unethical. We are being taken for a ride by Zesa. What they are doing is scandalous,” Mr Kanyekanye said.
He said CZI and the Chamber of Mines engaged Zesa and the Ministry of Energy and Power Development over the issue without success.
“The attitude of the ministry and its officials is totally wrong. It is anti-business. We are going to court to seek an interdict. We are also going to engage other arms of Government,” he said.
In its legal action, Mr Kanyekanye said industry would challenge Energy and Power Development Minister Elton Mangoma to appoint “a proper ZERC board” and saying the current commission was “running as a proxy to the minister”.
Zesa said on Monday that the special arrangement was voluntary, while Minister Mangoma professed ignorance over the matter.
“I am not aware of that. The CZI has not come to me about the issue. They should come to me as a minister and I will deal with it,” he said.
Minister Mangoma also said he was not aware of intentions by the CZI to seek legal action against Zesa.
He said as minister, he did not care whether industry paid US$2 million or US$6 million in electricity costs annually, arguing bills were charged according to one’s usage.
Zesa’s public relations desk on Monday said: “The Zimbabwe Power Company (ZPC), a subsidiary of Zesa Holdings entered into a voluntary scheme with mining and industrial consumers to resuscitate small thermal power stations of Harare, Bulawayo and Munyati with the intention of boosting electricity supply and availability to sustain business. The win-win decision wherein interested customers agreed to pay a special tariff of US13c/kWh for uninterrupted electricity supplies has been applauded by a majority of large electricity consumers as it has gone a long way to sustain their operations.”
“It should be realised that it would have been extremely expensive for the generating company, the Zimbabwe Power Company to manage the costs associated with the resuscitation of small thermals without a special tariff hence it entered into mutual agreements with mining and industrial consumers to boost electricity generation and availability through a special tariff,” Zesa added.
The power utility said it was “a responsible corporate citizen and principled market player not bound by the dictum of force-throating its customers with tariffs.”
Zesa claimed it always pursues a transparent consultative process “which in this case was made known to the regulator and other key stakeholders of the power utility.”