Tariff increase by Zesco justifiable – Kamanga

[By Emelia Phiri]

ENERGY expert Andrew Kamanga says the proposed increment on electricity tariffs by Zesco is not questionable due to the rampant load shedding.

Kamanga, who is also Northwestern Energy Corporation Limited managing director, said there was a rift between generation and supply of power.

“If you look at the current scenario we have got a couple of independent power producers (IPPs) in Maamba, Lunsemfwa Hydro as well as Ndola Energy and all the IPPs are selling their power to Zesco, you heard in the presentation Zesco is buying the power from the IPPs at 11 per cent and selling at six per cent,” Kamanga said.

“The commercial side is reasonably within expectation but ultimately the cost of power impacts on the economy negatively and also the lack of power is a big cost as you may expect all these small-scale operators are suffering currently because load shedding is having a serious effect. Even if you want to address the situation in a short term with bringing in the triple generators like diesel generators that again is a huge cost because diesel is expensive.”

He said for Zesco to be an efficient entity, it should only concentrate on generation and transmissions and not distribution which was the most expensive part of power generation.

Kamanga said going forward Zesco should allow private investment in the energy sector.

“I would want to see a situation where there is a move away from the IPPs selling the power to Zesco and the government should be able to allow the selling of power to any customer in the market. That way we are going to avoid Zesco carrying the huge financial burden,” he said. “I’m sure you have seen in the last couple of days even when Zesco is talking about importing power there is a $40 million bill being talked about. It is expected that if government was to open up the power sector we would obviously like to see Zesco focusing more on generation and transmission and being able to allow even further private sector participation in distribution.”

Kamanga said Northwestern Energy has been operating for over 12 years.

“I think it’s also a good time for other distributors to come into the market but again it will be a case of government policy,” he said.

“I hope that Zesco will be given a sufficient tariff increment in terms of sustainability. We now need to look at the next 20 years, the next 50 years, so we need to reorganise the power market.”

Kamanga explained that there were so many companies that depended on power as a key input cost.

“Unfortunately we have a situation where there is a mismatch between the power being generated and what is available in terms of supply,” he observed.

“So to bridge that gap you obviously have to look at pricing.”

Kamanga noted that Zesco had done two fundamental changes in terms of the residential customers.

“Zesco has now reduced the R1 band in terms of the subsidised power from 200 to 100 kilowatts and they have also increased the R3 – the price is slightly higher. So for those consumers who want to go above 200 kilowatt hours will obviously be paying a little bit more,” said Kamanga. “Going forward, my view would be that government should seriously consider opening up the power industry or market as it were because that is the only way we are going to be assured that we can attract new generation.”

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