Various individuals and industrial electricity consumers have asked the Energy Regulation Board (ERB) to reject the proposed electricity tariff increase by the Zambia Electricity Supply Corporation ( ZESCO).
ZESCO has proposed electricity tariff increment of between 40-45% for domestic users and 70-75% for the industrial sector.
Zambia National Farmers Union (ZNFU) first vice president, Jervis Zimba said at a public hearing on the ZESCO tariff review in Lusaka today that the proposed increment for the industrial sector is too high as it will have a direct impact on production costs and prices of items in the basket of goods that are monitored for inflationary trends.
Mr Zimba noted that if the cost structure of the Zambian producers becomes unfavourable, this will adversely affect food balance and will undermine the country’s position as the potential food basket of the region.
He observed that there is need to ensure that the cost of power to productive sectors of the economy remains as low as possible in order to derive full benefits from Zambia’s natural comparative advantage in agriculture.
Mr Zimba said that the proposed tariffs should be reversed with 40-45% being for the most productive sectors and 70-75% for non productive sectors.
Mr Zimba charged that the final increase in ZESCO tariffs that will be agreed upon should translate into improved funding for maintenance works at the local level so that the supply of electricity can become more reliable than the current situation.
He appealed to ZESCO to also publicise information on how much the mining sector are contributing in their current electricity tariffs.
Mr Zimba said electricity consumers need the assurance of ZESCO that the mining sector is paying its fair share of the costs of expansion.
And the Zambia Association of Chambers of Commerce and Industry (ZACCI) Executive Director, Justine Chisulo said the proposed tariff increment by ZESCO was too high and too sudden.
Mr Chisulo said that in as much as it supports tariff adjustments, the proposed electricity increments by the power company was unjustified as the cost of doing business will skyrocket.
He advised that ZESCO should among other things try to recover over K300 billion it is owed by various Government agencies adding that even salaries and gratuity it gives to its contract employees should be reduced for the company to manage its operational costs.
Speaking earlier, ERB Chairperson Sikota Wina said that it is the Board’s objective to ensure that quality energy services are provided at reasonable prices.
Mr Wina noted that since its inception it has dealt with more than 10 tariff reviews for ZESCO.
He noted that this year’s review has been most comprehensive adding that it attracted 60 submissions and more stakeholders than before.
Mr Wina further noted that the review has come at a wake of a looming power deficit both in Zambia and in the entire Southern African Region.