Zesa tariff hike: Solution to power cuts?

EFFICIENCY in power generation and distribution will improve electricity supply and revenue inflow for embattled power utility Zesa Holdings, energy experts have said.
This follows a recent application by The Zimbabwe Electricity Transmission and Distribution Company (ZEDTC) together with the Zimbabwe Power Company (ZPC), both Zesa subsidiaries, to the Zimbabwe Energy Regulatory Authority (ZERA) for a review of electricity tariffs.
The development comes at a time when the country is facing severe power shortages caused by depleting water levels in Kariba Dam together with falling capacity at Hwange Thermal Station.
Energy and Power Development Minister, Dr Samuel Undenge suggested that a tariff hike would help Zesa cope.
Justifying the application, Zesa argued that the proposed tariff hike is meant to cover the increased costs of emergency power and additional imports of about 200 MW in order to maintain supply at current levels.
If the application is accepted, experts predict that the tariffs may go up from the current 9.8 cents per kilowatt to as high as 14 cents per kilowatt, which is believed to be the average price of electricity in the SADC region.
However, the decision has proved to be unpopular with consumers and business as they accuse Zesa of failing to give concrete reasons behind the tariff hike.
Experts are arguing that Zesa’s inefficiency has led to a shambled generation and distribution network which has many leaks and a tariff hike will not address that.
They say Zesa’s billing system has also led to many losses in revenue as it is hugely flawed.
It is said that Zesa loses about 300 MW through technical losses of power.
More over, the introduction of prepaid meters is said to have worsened the flawed billing system with reports that about US$10 million is lost every month.
Energy expert, Engineer Francis Masawi said Zesa should be honest about the situation on the ground in order for the existing problems to be resolved on a long-term basis.
“They (Zesa) should be giving convincing reasons as to why they want to increase the tariffs and so far they haven’t given one convincing reason,” he said.
“If they want to use the argument that everyone else in the region is increasing their tariffs they should also state reasons given by their counterparts for the increase.
“We should not always copy what is happening in the region because we are not a region, we are Zimbabwe and we have different problems.”
Engineer Masawi argued that Zesa wants to increase tariffs to cushion itself from its low power generation capacity.
He said Zesa is trying to compensate for revenue loss by increasing tariffs.
“Zesa should tell us why they are failing to sell more electricity than they used to in the past,” he said.
“They should be addressing inefficiency in their operations, they are losing a lot of electricity during generation, distribution and consumption.
“They should address those things or else the hike won’t help.”
Consumer Council of Zimbabwe executive director, Ms Rosemary Siyachitema also lamented the lack of efficiency at Zesa, adding that the utility should be honest and truthful to the nation.
“They (Zesa) consulted us but they did not come with full information so we asked them to provide us with a full document stating clear reasons (for the tarriff hike),” said Ms Siyachitema.
“From the meetings we had, we felt that some of the things they were saying were not substantiated, we feel there are still a lot of inefficiencies at ZETDC or else the hike won’t bring anything good. The issue of inefficient billing system at ZETDC has always been highlighted but nothing has really changed.
“As one of their reasons, they stated that they are being required to pay upfront when importing electricity.”
E-mailed questions sent to Zesa spokesperson, Mr Fullard Gwasira, had not been responded to by the time of going to press.
Another energy expert, Professor Edward Chikuni said with the need to invest in more power generation projects, there is always a temptation for Zesa to hike the tariffs.
“The whole tariff system is administered by Zera and it would be hard to make an accurate assessment from outside because you do not have the full facts,” he said.
“However, with low power generation, Zesa wants to raise capital for power generation projects, so there is always a temptation to hike the tariffs.
“But from a consumer point of view, the tariff hike would really be a burden because of the economic challenges.
“So what the country needs right now is long-term, not short-term solutions.”
Energy consultant, Mr Kotsai Makamure said efficiency could be improved at Zesa by employing an open smart metering system which would eliminate technical losses.
He said the open smart meters have four standard embedded relay switches that can be centrally opened and closed for targeted customers (a single household, suburb, company premise) or for the entire nation, at the flick of a single button, in accordance with the national supply priorities at the time.
Electricity is then directed to where it is critical without destabilising national societal equity.
“In essence, what this means is that once an open smart meter is installed for a consumer, ZETDC has no need whatsoever to switch off the entire household (the current “blackout load-shedding” situation), but will centrally switch off only the targeted heavy loads,” he explained.
“This will enable the Ministry of Energy and Power Development to immediately save 300 MW from the removal (smart load allocation) of all the 300 000 installed electric geysers with the flick of a single button at the national control centre.”