ENERGY Minister Peter Kapala says the Energy Regulation Board was right to nullify the increased connection and meter separation charges by Zesco.
In an interview, Friday, Kapala said his ministry was studying whether anybody had been charged under the purported new rates.
“ERB is right. Just read the content of what ERB has said and follow that. They are the regulators so let’s follow what the regulator said. We are dealing with that internally, it is resolved already. Let’s first have a look you might find that nobody was billed on the purported new rates we need to find out,” said Kapala.
And in a follow up statement, Sunday, Kapala said Zesco could not remove subsidies without ERB’s approval.
“The position of the government, the Ministry of Energy and my office is that ZESCO has to follow procedure in changing any charges or fees under it. Further, ZESCO has to follow what the regulator says. The regulator in this case is the Energy Regulation Board or ERB. This means that the removal of the subsidy, which cushioned the cost of connections and meter separation, in line with the provisions of the law, can only be done through ERB and not by ZESCO alone. The ERB has indicated that the application by ZESCO to revise connection charges by 213 percent was deferred, pending an in-depth study and further consultations. ERB expects ZESCO to resubmit an application for connection and meter separation fees once the conditions given to the utility firm are met. ERB has also revealed that at the last tariff application in 2019, ZESCO applied for a revision in electricity tariffs and connection charges, but at the time only the tariffs were approved and revised,” stated Kapala.
“ERB was established by the laws of Zambia to regulate undertakings/utilities in the energy sector including Electricity, Fossil Fuels (petroleum) and Other Forms of Energy such as solar and coal, through specialised licences it would issue. Currently, regulated utilities include ZESCO, Copperbelt Energy Corporation and Lunsemfwa Hydro Power Company under the electricity sub-sector. ERB also regulates the refining, marketing of, importation and transportation of crude and finished petroleum products under the petroleum sub-sector. According to the Energy Regulation Act No. 12 of 2019 and the Electricity Act number 11 of 2019, the functions of the Energy Regulation Board include to “determine, regulate and review charges and tariffs in the energy sector”. This includes charges and tariffs charged by ZESCO.”
On Tuesday last week ZESCO Limited announced that it had reverted to using non subsidised rates in order to prevent the accumulation of a backlog of connections.
“ZESCO Limited has continued to use market reflective fees for all new electricity connections to provide an effective and efficient service to its customers. The said connection fees have neither been increased nor changed but are market driven as has been the case for all non-standard connections. This is in contrast to the media circulation that connection fees have been increased,” the company said in a statement.
But the Energy Regulation Board nullified Zesco’s announcement.
ERB Public Relations Manager Namukolo Kasupe said ERB was the only one with the power to determine, regulate and review charges and tariffs.
“The Energy Regulation Board ERB has clarified that it is not in receipt of any application from ZESCO Limited (“ZESCO”) to vary its connection charges, as legally required under Energy Regulation Act No. 12 of 2019 and the Electricity Act No. 11 of 2019. ZESCO is further bound to strict adherence of the governing conditions in its standard license for the supply of electricity. Therefore, any change in ZESCO’s connection charges in whatever form or structure, as reported on various media platforms, does not have the approval of the ERB and its null and void forthwith. For the avoidance of doubt, the Energy Regulation Act under section 4(j) vests the power and function to determine, regulate and review charges and tariffs in the ERB. Further, section 25 of ZESCO’s standard License for the supply of Electricity unequivocally proscribes ZESCO from changing tariffs or any other charge’s for any product or service provided in the course of the licensed activity without prior approval of the ERB,” said Kasupe.