LUSAKA High Court Judge Elita Mwikisa has quashed Energy Minister Matthew Nkhuwa’s decision to declare Copperbelt Energy Corporation (CEC’s) transmission and distribution lines as a common carrier.

According to her findings, judge Mwikisa says CEC was not fairly treated by the Minister who arbitrarily used his powers to declare its transmission and distribution lines as common carrier without giving CEC a chance to negotiate terms and conditions for the use of its infrastructure.

She notes that what the Minister could have done under the circumstances, was to declare only those transmission and distribution lines of CEC that supply power to Konkola Copper Mines (in liquidation) and not to declare the entire interconnected system of CEC as common carrier thereby opening it to any enterprise to use it indiscriminately.

Justice Mwikisa further found the Minister’s action in declaring CEC’s transmission and distribution lines as common carrier, disproportionate and ultra vires the provisions of the Electricity Act, more especially section 15 of the Act and therefore illegal.

In this matter, CEC which cited the Attorney General and the Energy Regulation Board (ERB) as respondents, was seeking a declaration that Nkhuwa’s decision dated May 29, 2020, to declare its transmission and distribution lines as common carrier was unlawful.

CEC wanted a declaration that the decision of the Minister of Energy to direct it to provide a wheeling path for Zesco Limited to supply power to KCM on terms directed by the Energy Regulation Board was illegal and therefore null and void.

It also wanted a declaration that the decision by the Director General of the Energy Regulation Board of May 31, 2020 to direct it to charge a wheeling tariff of US$5.84/kw/per month was illegal and therefore null and void.

CEC further wanted among others, an order to quash the said decisions and a further order to stop Nkhuwa from enforcing SI no.57 of 2020 as it is illegal.

In her judgement delivered, Friday, judge Mwikisa noted that there was a failure on the part of the Minister to act with procedural fairness towards CEC.

She added that the Minister’s decision to declare CEC’s transmission and distribution lines as common carrier through the passing of S.I No.57 of 2020, had taken away CEC’s rights to negotiate terms and conditions of use of its infrastructure in view of the fact that any enterprise can use CEC’s infrastructure at the wheeling charge that ERB has set, which CEC had argued was not cost effective.

“The applicant (CEC) was not given a chance to negotiate the terms and conditions of use of its infrastructure with KCM. In fact, KCM has abrogated its contractual obligations under the Power Supply Agreement (PSA) to pay the debt owed to CEC amounting to USD 144 million. I agree with CEC that S.I No. 57 of 2020 is too wide in its application in that it affects all the applicant’s transmission and distribution lines instead of only affecting lines supplying power to KCM,” judge Mwikisa said.

She found that the minister’s decision to declare CEC’s distribution and transmission lines as a common carrier was not for purposes of the Act but was intended to assist KCM avoid the effect of section 43 of the Electricity Act.

Judge Mwikisa agreed with CEC that the Minister’s decision was meant to ensure continuous supply of electricity power to KCM, despite being indebted to CEC.

“The Minister’s decision is ultra vires the provisions of section 15 (2) of the Act and therefore illegal. KCM failed to pay the debt of USD144 million and CEC has the right under section 43 (1) to discontinue the supply of power,” she further said.

Judge Mwikisa also said ERB’s decision to set the wheeling tarrif before the contracting parties could engage in negotiations was an act of illegality and was procedurally improper.

She also found that ERB, on the authority of the Minister violated section 15 (2) of the Act by dictating the wheeling tariff payable to CEC by Zesco when the law specifically provides that terms and conditions ought to be agreed between the enterprise and the owner of the transmission or distribution line.

“All in all, I find that the applicant has succeeded on all grounds under order 53 rule 3 of the Rules of the Supreme Court. I accordingly quash the decision of the Minister of May 29, 2020, to declare the applicant’s transmission and distribution lines as a common carrier. Costs follow the event,” ruled judge Mwikisa.