HONE SIAME, Lusaka
THE Energy Regulation Board (ERB) says the mines are not affected by the 75 percent hike in electricity tariffs because supply of electricity to mines is governed by bilateral agreements between Zesco and individual mining firms.
ERB consumer and public relations director Agnes Phiri said in a statement released in Lusaka yesterday that Zesco’s application for upward adjustment of electricity tariffs did not include mining tariffs because the mines have separate agreements with electricity companies.
Ms Phiri said ERB cannot unilaterally impose a tariff on the mines outside the bilateral agreements they have with Zesco or the Copperbelt Energy Corporation and the board’s attempt to do so in 2014 led to a court action.
“As such, the terms are negotiated on a case-by-case basis between the mine and supplier and contracted through Power Purchase Agreements (PPAs). Under the said agreement, ERB is then engaged to ratify the PPAs after the two parties have reached an agreement,” Ms Phiri said.
She said the mining tariff has not been abandoned or overlooked but the matter is being actively pursued by all key stakeholders, including Government, utilities and mining companies.
“The ERB would like to clarify its decision to approve 200kWh (units) lifeline tariff against the 300kWh requested by Zesco. Our assessment showed that 200kWh is the realistic lifeline to provide for basic lighting and use of electrical gadgets in a standard home, excluding cooking and heating,” Ms Phiri said.
She said ERB takes into consideration that the lifeline tariff is intended for the lower income bracket, whose basic electric requirements will be met in the allotted quantity.
Ms Phiri said the current lifeline tariff should be viewed as an interim measure pending the conclusion of the ERB cost of service study.
“Units over and above this begin to cater for other activities associated with the higher income bracket which can afford to cook on electric stoves and use geysers. A higher lifeline band would entail that a subsidy is extended to the higher income groups, rather than the vulnerable,” Ms Phiri said.
She said on May 10, 2017, ERB ordered Zesco to engage the relevant ministries and stakeholders to identify communities and individuals who will require the lifeline to meet their basic electricity needs and instal appropriate smart meters accordingly.
Ms Phiri said ERB acting chairperson Francis Yamba categorially stated that tariff decisions for future proposals will be premised on studies that determine the appropriate level of lifeline tariffs in line with international best practice.
The ERB has approved Zesco’s 75 percent electricity tariff hike to be effected in two phases with an initial 50 percent taking effect on Monday next week, while the remaining 25 percent will be effective September 1.