CZI, Zesa clash looms

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A fresh clash is looming between Confederation of Zimbabwe Industries (CZI), Zesa and the Zimbabwe Energy Regulatory Authority (Zera) over the increase of tariffs for ring-fenced companies.

A number of companies, in particular those in mining, have in recent months entered into agreements with the power utility to be provided with uninterrupted power supplies.

In a statement CZI said Zesa was offering companies new contracts based on a new set of conditions that include an increase of tariffs from 12,66 cents/KWh to 14,84 cents/KWh.

It said for high-voltage supply companies whose capacity exceeds 300K/VA, the new contracts have a heavy maximum demand charge and time of use.

“It has come to our attention through our members that Zesa is sending new contract forms for the ring-fenced customers. These new contracts based on new set of conditions which include increase of tariffs from 12,77 cents/KWh, 14,84 cents for low-voltage supply customers,” said CZI.

“CZI strongly objects to such heavy increases hence we are now engaging Zesa and the Zimbabwe Energy Regulatory Authority (Zera). Under the Energy Regulatory Act, new tariffs are subject to consultation with customers and approval by Zera, which to our understanding has not happened.”

Last year CZI filed an application to compel Zesa to scrap its 31% electricity hike, without success.

The business grouping said contracts companies were being asked to sign showed it would be by mutual agreement implying therefore they should be negotiated.

Some of the ring-fenced mining companies include Metallon Gold’s How Mine and Shamva Gold Mine, Duration Gold Mine, Mwana Africa’s Freda Rebecca, Zimbabwe Mining Development Corporation’s Jena Gold Mine, Renco Mine, Golden Valley Mine, Turk Mine,Dalny Mine, and Unki Platinum Mine among others.

According to CZI under the Energy Regulatory Act, new tariffs were subject to consultation with customers and approval by Zera, which it says has not happened.

“Members are therefore advised not to panic and not sign the new contracts, pending the outcome of negotiations,” CZI said.

Power demand for the country is expected to rise by 29% this year due to demand from mining companies.

Zesa generates between 900 megawatts (MW) and 1 200MW compared to a demand of 2 200MW.

In September 2011 the Zimbabwe Electricity Regulatory Commission increased the average tariff to 9,83 cents per kilowatt hour from 7,53 cents to recover operating cost.