Energy Expert Johnston Chikwanda says it is very unfortunate that the Copperbelt Energy Corporation and Zesco have failed to reach a mutually acceptable power supply deal.
Mr Chikwanda says it was expected that it was not going to be a smooth separation between these two companies although it was and it still remains possible to resolve their issues.
He said the reported time frame in which the negotiations started was not enough.
Mr Chikwanda said given the intricacies around this two decade old relationship, seven weeks of negotiations were not enough.
He said with Zesco stopping to sell electricity to CEC, CEC’s main income would be from charging Zesco for using CEC’s infrastructure (transmission charges) on the Copperbelt in order to remain viable.
Mr Chikwanda said although there is a thought that CEC could import electricity from the region to supply its many customers, this is not guaranteed due to the lack of adequate electricity in the region and the high cost of importing electricity which is likely to me more than the price at which CEC is currently selling to its long term customers.
“Hence, the most realistic vector which CEC will appear to depend on for survival is to charge transmission charges (transmission tariff/wheeling charges).
Gaining full insight in this transmission charge which is also known as wheeling charge or transmission charge and assessing whether it is realistic or not is a matter for the Energy Regulation Board (ERB) which was not part of the engagements unfortunately”, he said.
Mr Chikwanda chikwanda the ERB still remains the best vehicle to adjudicate over tariffs between its licensees in order to maintain stakeholder harmony among players and ensure a fair return on investment for various licensees adding that both Zesco and CEC are ERB’s licensees.
He said in this case, Zesco is only willing to pay a certain amount of transmission charge so that it is able to sell electricity at a profit to the Copperbelt.
Mr Chikwanda chikwanda the amount Zesco is willing to pay may not be the amount CEC wants to charge in order for it to meet its operational requirements, capital expenditure and a fair return on investment hence the challenge.
He said to make matters even more intricate, CEC will also be charged by Zesco for use of Zesco’s transmission infrastructure should CEC resort to importing electricity from the region in order to service its Copperbelt based customers.
Mr Chikwanda said without an independent body to adjudicate and oversee this kind of state of affairs, this matter will go very far and lead to unnecessary challenges. Because of the way both parties have handled each other, there is no trust between them which makes above board negotiations very difficult.
“This is why ERB must be proposed to examine to what each party wants to charge each other for use of its transmission lines. However, ERB is incapacitated due to inadequacies in the current Energy Regulation Board Act”, he said.
“This is the reason I have maintained that the new Energy Regulation Bill of 2019 and the Electricity Bill of 2019 should have now been enacted in to law by now. These Bills when passed into law will solve a lot vexatious challenges and gaps in the electricity sub sector. As of now, ERB is not legally mandated to intervene and set tariffs with regard to Bulk Supply Agreements between Zesco and its big customers which include CEC”, Mr Chikwanda added.
He has however commended government for showing strong praxis of leadership to ensure continued of electricity supply although it is at terms and conditions which CEC appear to be uncomfortable with.
Mr Chikwanda said for the sake of country and given what we currently going through, CEC shoukd allow the electricity to reach the customers while they ignite alternative measures to resolve the impasse.
He said this is a pure case for an independent body to resolve and the sooner it is resolved, the better.
This Energy Expert my foot Johnston Chikwanda, we remember this clown always bootlicking …you are the so called energy expert why didnt your govt invite you to the discussions, even empty tins like SG Mwila and Aunty Dizzy ignored you…really laughable.
Best option is CEC offering to sell its transmission line to Zesco and use the cash pile to pay off its obligations. The relationship btwn them is now toxic and expecting them to dance together in the supply of pwr to Copperbelt mines is unrealistic.
Simple, CEC just build a nuclear power plant in Lufwanyama. There are so many disused mine shafts in Kalulushi where you can deposit nuclear waste. Think outside of the box
So, what happened to the hot air Davies Mwila was breathing that he will appoint Ministers to resolve this power supply deal. Save Zambians from insanity. KZ, your defacto president Davies Mwila appointed ministers to conclude Zesco – CES negotiations. This type of incompetence is stressing up the energy supply industry. When we tell you that you need outside expertise to manage national issues, what value does grade 7 failure Mwila add to PF regime? Your boxed environment is a danger to the nation. Is the absent president aware that his authority is being undermined by you in particular.
8 1
Now we already know who has bargaining power!! This CEC got used to make money at the back ZESCO by merely distributing what the former produced! How does CEC want ZESCO to agree to terms even before ERB completes their studies on cost of production? So they (CEC)are out for now but power supply continues.Who has more bargaining power?
Tarino Orange, is this Johnstone Chikwanda whose father is former minister of finance Alexander Chikwanda. This so called expert once worked for Indeni and living in South Africa used to commute to Zambia for work paid for, by Inden. (They) Chikwandas have bought properties in South Africa and have continued milking Zambian companies through nepotism, they are all in strategic positions to them its not tribal but clever while Edgar Lungu doesn’t even know this matrix since he is busy being humble.
It is political if you know some of the key shareholders of CEC and which parties they belong too. Good ridance !!!
MunaDekhane – This guy is a PF sympathizer like that EAZ President that’s how less of a Professional he is ….just google his name, he is always bootlicking…always looking for consulting work but even his friend dont take him serious.
Is it a sin or illegal to own a business and belong to opposition? No government is permanent. What goes round comes round. Wasn’t Lubinda regretting being beaten by PF cadres at Kabwata market. And yet when sober people advise to stop cadrerism they are ridiculed.
The stupidity that reigns power in the corridors of state is imbecilic!
THE CEC SCAM HAD TO END
THE WHOLE ARRANGEMENT WAS DISADVANTAGING ZAMBIANS FOR THE BENEFIT OF A FEW WILY CORRUPT FORMER ZCCM POWER COMPLANY MANAGERS WHO AT ZCCM PFIVATISATION CONCOCTED A MANAGEMENT BUY OUT AND FORMED CEC.
TODAY THOSE CEC OWNERS ARE BILLIONAIRES A MILLION TIMES OVER AND SUPPORT hh.
INFACT GOVERNMENT SHOULD HAVE NATIONALISED CEC AND TODAY WE SHOULD NOT EVEN BE TALKING ABOUT WHEELING CHARGES
THE CEC INFRASTRUCTURE BELONGS TO ZAMBIA JUST AS THE ZCCM MINES BELONGED TO ZAMBIANS.
WHAT WE NOW EXPECT IS THAT ELECTRICITY TARRIFS ON THE BURDENED ZAMBIANS SHOULD NOW BE REDUCED BECAUSE THE CEC MIDDLEMAN HAS BEEN CUT OFF.
It’s another one of LPM’s legacies after KCM. We told him it was a bad deal but he didn’t want to hear any of that. He even put his relative to be in charge of Zesco when he also had shares in CEC, how was he expected to negotiate a better deal for Zesco? Today he owns most flats in Kitwe against FTJ’s directive to sell to sitting tenants
If CEC was exploiting people, then power on the Copperbelt should have been higher than the rest of the country, but it is not.
PF is mismanaging the economy and after this regime is out, we will have a shell of a country. The sooner we change government the better.
CEC WAS A ONLY A CONVEYOR OF ELECTRICITY FROM ZESCO TO THE MINES AND WAS LIKE A MIDDLEMAN MAKING HUGE FOR REVENUES FOR THE HANDFUL SHAREHOLDERS WHO ARE VIRULENTLY AGAINST PF AND SUPPORT HH AT ALL COSTS
Zambia First: Wht about the margins made by middlemen who supply petroleum to Zambia instead of dealing with companies that operate oil wells and hv ocean-going supertankers that carry crude economically?
Zesco is a PF cash cow , it’s monopoly should’ve been curtailed long time ago.
Even with exclusive electricity production and transmission , they zesco have failed , that’s why you have load shedding.
Breakup that PF cash cow and cader dumping ground zesc , or force it to sell on electricity in bulk and force it to transmitted power from other independent producers…
let City Councils be the middlemen between ZESCO and consumers then, as it is in other conutries doing fine. Its another way of empowering councils so that they can do their daily work.
Cn’t trust PF, everything about them stinks, even what looks genuine. There is always something fishy about their agenda.
As for business, you can own distribution assets, others can own power stations, they are all aspects of electricity business. What about Mamv and Itezitezi for example? They are in generation business which is their speciality, they sell everything to ZESCO who use it in exactly the same as CEC uses electricity made by zesco, and its no big deal. No one asks Zesco why they dont own Maamba collieries or Ndola Oil power station.
Its like maize, a farmer produces, another buys and transports it to the miller, who make mealie meal, is there anyone in this chain, who is doing the wrong thing? Another example is beer, the selling is done by bars, have you ever heard…
Zambian brewries demanding toown the bars?
Perfect Analysis Brother!!!