Consumer Unity Trust Society (CUTS) centre coordinator Chenai Mukumba says any power tariff increment without carrying out a Cost of Service Study will not be transparent and accurate.
And All People’s Congress (APC) party president Nason Msoni says the looming increment of electricity tariffs will be exploitative.
Last Tuesday, Energy Minister Mathew Nkhuwa said Zesco’s proposed electricity tariff increment would be effected, pending Cabinet approval, without waiting for the Cost of Service Study to be completed because the power utility was bleeding.
But in an interview, Mukumba questioned the procedure and evidence which government was using to increase power tariffs when the much-needed Cost of Service study had not been conducted yet.
Zesco’s proposed 113 per cent retail tariff hike was submitted to the Energy Regulation Board (ERB) last month, which they projected would earn power utility an unprecedented K16.1 billion in gross revenues, if approved.
“Ideally, the Cost of Service study needs to be completed before we see any tariff hike. It’s delay, according to the ERB, had been due to issues with the consultant. We are aware, indeed, of the fact that there may be potential increment that consumers need to pay for themselves electricity. Our concern has always been that without the Cost of Service study, we are not sure of what the actual cost consumers should be incurring of electricity is, and how much of the cost is due to inefficiencies within Zesco,” said Mukumba.
“Unfortunately, we don’t see transparency in this particular transaction largely because we do not have the evidence necessary to show what calculations have resulted in this particular increment. This is why we dearly requested for the Cost of Service study to take place first to ensure that consumers paid for their share fair of electricity and any other increments prescribed due to inefficiencies by Zesco are also taken into account do not pass on to consumes. We’re, therefore, of the view that the Cost of Service study needs to be completed first and foremost. If an increment is being undertaken, we require that Zesco also indicates on their part what internal measures are being undertaken to ensure that we can reduce inefficiencies that are artificially increasing the cost of producing electricity in Zambia.”
And Msoni said effecting any electricity tariff increment without proper consultation was an abuse of Zambians.
“We are shocked by the kind of reasoning of the Minister of Energy! He must have gone off the tree to think and suggest that consumers should be financially abused in order to stabilize a poorly-managed state quango fraught with corruption and external borrowing. We fear that this corrupt government may be employing criminally-adopted methods of using upward tariffs adjustments to meet its international obligations, which it is struggling to keep up with payments,” Msoni said.
“The frequency of tariff adjustments is tantamount to taking pecuniary advantage of the loyalty of our citizens to the utility. We think that nothing, yet again, makes a good case for upward tariff adjustments. This is certainly abuse of customers and is tantamount to taking advantage of the monopoly of business on the market. Zambians have become victims of extortion and theft disguised in the form of upward tariff adjustments!”
He insisted that government should be patient until the exhaustion of the Cost of Service study.
“Zambians cannot be subsiding inefficiency, grand theft, extortion and incompetence of the state enterprise! This is certainly unfair trading requiring probing and investigations to understand the underlying factors. When you commission a study, the principle of that study is that you have to complete the process. Furthermore, you are required to wait until the exhaustion of the evaluation,” he added.
“We think that the way Zesco is being run leaves a lot to be desired. We urge the Minister of Energy to think beyond the insatiable appetite of pushing for regular upward tariff adjustments and avoid short-term interventions, which clearly are not working. It appears all his short-changed tariff adjustments are failing to provide any realistic long-term solution to the unravelling financial mess being experienced at Zesco.”
Msoni said government should desist holding citizens to ransom through the manipulation of the ERB and Zesco by constantly enforcing high power tariffs.
“Certainly, this is not working and we think that this government has become part of the problem to deliver affordable energy to Zambians. The current poor services being offered by Zesco should not warrant for any upward adjustment. The services are extremely shoddy and pathetic! In a civilized society, the public utility would be disbanded to allow for competition and efficiency in the provision of services,” said Msoni.