Energy Forum Zambia says the country’s power utility company should consider revising it’s tariffs so as to attract investment in the energy sector and help reduce power shortage in the country.
Forum Chairperson Johnstone Chikwanda said in the face of current prolonged load shedding the State owned company should either increase tariffs in order to support more electricity imports or the country continue with the painful status quo.
He said there is excess power in the Southern Power Pool which can be imported to reduce the prolonged load shedding but that it could mean paying more.
He also said ZESCO should inform the nation how much the company is losing per month due to inadequate electricity from its facilities.
“Energy Forum Zambia sympathises with electricity consumers for the debilitating energy poverty being experienced not just in Zambia but in sub-Sahara Africa as a whole. On the other side of the isthmus, the Forum sympathises with ZESCO for loss of revenue during load shedding hours. It would be appreciated if ZESCO could inform the nation how much revenue is being lost per month due to inadequate electricity from its facilities.
“The Forum is of the view that there is some electricity in the Southern Power Pool which can be imported to reduce the prolonged load shedding currently being experienced in Zambia. However, ZESCO is unable to import MORE expensive electricity which in turn will be sold at a loss in Zambia. It is either tariffs are increased in order to support more electricity imports or we continue with the painful status quo. In other words, the unattractive electricity tariff in Zambia is the biggest trigger of the squalor being precipitated from this sector.
“Therefore, the tariff structure must be revised as a matter of urgency. Bulk customers and Industry consume more electricity than domestic households. This is why the biggest portion of the electricity subsidy was spent on bulk consumers and Industry compared to domestic households. Hence, the focus of the tariff increase may have to weigh heavily on the bulk customers and industry,” he said.
Mr Chikwanda also called government to establish a Central Energy Fund (CEF) which can be used to support emergency expenditure and support other sector related objectives such as the financing of the unbundling ZESCO into three entities.
“In addition, the Forum wishes to call upon government to establish a “Central Energy Fund” (CEF) as a matter of urgency. The CEF can be financed by inserting a levy in the electricity pricing model either for all customer categories or for selected customer categories as phase 1. The CEF can be used to support emergency expenditure and support other sector related objectives such as the financing of the unbundling of ZESCO into three entities.
“Unbundling a vertically integrated utility is not an easy undertaking. There is considerable preparatory work, implementation, workforce migration to new structures and post implementation phase. It cannot be achieved in 2 years. It is a costly undertaking which must be financed using different innovative avenues. Therefore, the PF Government may find the establishment of the CEF as a suitable mechanism to support such undertakings.”