Consumers owe Zesa $818 million

Published: 10 February 2014

National power utility Zesa Holdings (Zesa) says it is owed $818 million by consumers - including government, domestic and commercial users.

It said the unpaid bills were hampering its operations and viability.

Last week, Zimbabwe Electricity Distribution Company (ZETDC) - a Zesa subsidiary - told a stakeholders' meeting that the defaults were a major cause of the increased load shedding.

"If we had our way, we would have switched off everyone who owes us and it's provided for in the law. However, the powers-that-be do not allow us to cut off defaulters and they have good reasons for that," a ZETDC official said.

Figures released by ZETDC indicate that government owes the parastatal $15,8 million while local authorities, mining companies, commercial and domestic consumers owe $147,9 million, $140,3 million, $118 million and $276 million respectively.

On the other hand, farmers and other parastatals owe ZETDC $55,3 million and $23,5 million respectively.

The distribution company, which has over the years found it difficult to deliver its services efficiently due to vandalism and unpaid bills, said it was seeking a five percent tariff increase to help improve its operations.

"The said average expenditure has been than the average tariff awarded. Hence the tariffs we have been awarded in the past have not been sufficient to sustain the minimum activities of the utility," said the ZETDC official.

The country's electricity tariffs are currently pegged at 9,86 cents per kWh and are likely to be increased to 10,36 cents per kWh.

A tariff of 9,83 cents per kWh was awarded in 2009, but was reversed and replaced by a 7,53 cents per kWh in February 2009.

There was no tariff hike in 2010 while a 9,83 cents per kWh raise was approved for 2011.

However, the Consumer Council of Zimbabwe (CCZ) said there was no justification for the State-owned power utility, to increase tariffs due to lack of improvement in service delivery.

"Over the years we have not seen an improvement in power generation but increases in tariffs to consumers," said Phillip Bvumbe, the CCZ chairperson.

Zimbabwe needs about 2 200MW of electricity at peak but generates just 1 300MW, importing the remainder.

The southern African country is currently introducing pre-paid meters to improve it's the power utility's revenue and avoid resorting to charges based on estimates.

In 2012, Zesa handed out more than 5,5 million power-saving fluorescent light bulbs to households across the country to curb consumption.

Industry experts however argue that there is need for investments to be made in order to increase the amount of reliable capacity.

"The increase in reliable capacity should be made available at a competitive price," Douglas Chingoka, the Zimbabwe Power Company corporate executive assistant.

Gloria Magombo, the Zera chief executive said her organisation will deliberate on the tariff application, interrogate the costs of production of electricity and come up with a tariff that will ensure viability of the electricity supply industry but also affordable to all customers.

"It is also important to note that tariff application does not necessarily result in tariff increase.

"Several factors are taken into consideration before a final determination is made," she said.
- dailynews

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