ZESCO Limited has justified the proposed increase in electricity tariffs.
Speaking during the Energy Regulation Board (ERB) ZESCO tariff review public hearing in Lusaka today, Acting Managing Director Bestty Phiri says the primary driver for the Tariff Application is the need for investment in new electricity infrastructure, Inflation leading to rising operating costs and the Exchange rate fluctuations.
Mr Phiri states that the consequences of not having tariff adjustment will include perpetual load shedding, higher energy costs to the entire economy, insufficient capacity to support accelerated growth in the economy, under investment in the sector among others.
And making submissions, Zambia Association of Manufacturers (ZAM) Chief Executive Officer Maybin Nsupila advised ZESCO to consider adjusting the proposed tariffs in a phased manner.
He says if Zesco will not consider adjusting the tariffs gradually, the country’s manufacturing industry will collapse with the proposed increase.
Mr. Nsupila says ZESCO should establish the targeted tariff level for 2019, workout the needed annual increments and share them with consumers for consensus and enable them plan.
He adds that ERB should ensure ZESCO signs service level agreements with its clients particularly commercial and maximum demand clients, adding that other reforms aimed at improving efficiencies within ZESCO and reducing the administrative cost of service as well as improve service delivery need to be implemented over the migration process.
And Zambia National Farmers Union senior economist Humphrey Katontonka says while the Union supports the need to increase tariffs in principle; the proposed increments by ZESCO are just too high to be implemented at once.
Mr. Katontoka says ZESCO’s proposed 244% increment is far too high for farmers to remain viable.
He suggested that the tariff increment be phased into 4 equal increments over a period of two (2) years in order to allow commodity prices to catch up and give farmers a chance to prepare.
And the Energy Regulation Board (ERB) ERB Executive Director Langiwe Zulu says the performance of ZESCO will be considered in arriving at the final tariff award.