Hre Residents Trust: ZESA Rates Hike Unacceptable
Harare- The Harare Residents’ Trust (HRT) has been battling to convince
residents to be patient with the Zimbabwe Electricity Supply Authority
(ZESA) over the intended increase in tariffs by 31 percent with effect from
01 September 2011, as approved by the Zimbabwe Electricity Regulatory
Commission (ZERC).
The ZERC authorized the ZESA to increase its rates on Thursday 25 August
2011 from 7, 53 cents to 9, 83 cents per unit per hour, arguing that
Zimbabwe’s electricity charges are the lowest in the region where rates are
reportedly between 13-14 cents kilowatt hour (VOA News 26 August 2011).
According to Fullard Gwasira, the ZESA Holdings spokesman, the increases are
meant to bolster power generation, reduce electricity blackouts, and use
additional revenue to purchase modern billing equipment to address residents’
concerns on inconsistent billing.
This proposed increase is the second in 2011 by ZESA, again, after seeking
and getting ZERC approval for an increase effective 1 February 2011, a
situation that has left thousands of consumers in debt, something they have
failed to critically examine before this latest increase has been approved.
This was eventually shelved after government intervention. The same
justification that ZESA is offering today is the same that they gave in
February as they justified the proposed increases.
The Herald (21 February 2011) quoted Fullard Gwasira, the ZESA Spokesman as
saying: “The increase in tariff allows ZESA to import more power and ensure
consistency in power supplies. It will reduce load-shedding. Consumers
should actually expect an improvement in the services offered since we are
now operating all power stations efficiently,”
The experience of residents on load-shedding, non-regular maintenance of
electricity infrastructure leading to high incidences of electrocution of
people, inconsistent billing and numerous apologies from ZESA, are crucial
issues that have to be immediately addressed if ZESA is to convince all
stakeholders, mainly ordinary consumers about the new rates.
At its special meeting on 8 July 2010, the Competitions and Tariffs
Commission (CTC) found that ZESA’s actions constituted “restrictive
practices that are a manifestation of the abuse of monopoly”. In a
statement, quoted in various media in August 2010, the CTC said: “ZESA
should use actual meter readings when billing its customers subject to the
provisions of the Zimbabwe Electricity Supply Authority (Miscellaneous
Charges) By-Laws” of 1998.
While the HRT recognizes the significant strides ZESA has made in trying to
address power generation challenges, the current wave of increases are
‘ill-timed, inconsiderate and will plunge most consumers into deeper debt’
because their incomes have not changed in the last 12 months.
In separate responses to a question on what they thought on the ZESA
increases, the majority of residents denounced ZESA for even seeking
authority from ZERC to increase rates, which was subsequently given, saying
that the national power utility was using inappropriate tools to determine
the new electricity rates. The performance of the economy and the ability of
the consumers to pay the new tariffs determined the success or failure in
the achievement of the intended objectives.
As long as the majority of citizens earn below the poverty datum line as
released by the Poverty Reduction Forum Trust of Zimbabwe and the Consumer
Council of Zimbabwe, there is potential for increased conflict between ZESA
and its customers who will fail to pay the rates in full, accumulating huge
debt in the process.
Considering that schools reopen in a fortnight, most parents are already
battling to raise school fees and levies for their children and meet other
financial obligations like rentals, medical needs, food and water bills. The
new increases will impact negatively on these residents whose incomes have
remained stagnant.
The ideal approach from ZESA that the HRT expected to be followed was a
major stakeholders’ meeting involving consumer organizations, ZESA Holdings,
business and industry to deliberate on power generation challenges, load
shedding and billing of electricity, among key points of discussion.
As the pressure from the residents of Harare for a quick solution mounts on
the HRT to intervene, ZESA is urged to expedite the process for the
installation of pre-Paid meters which would ensure that residents pay for
electricity actually consumed rather than the current situation where most
bills are based on estimates.
Before ZESA can institute the new increases, the power utility should comply
with the directive given by the Competitions and Tariffs Commission (CTC), a
statutory body mandated to regulate competition and abuse of monopolies by
state and private enterprises in terms of the Competition Act (Chapter
14:28). This was subsequently endorsed confirmed in a High Court ruling
which ordered ZESA to credit accounts of consumers overcharged against set
rates between February 2009 and November 2009.
Harare Residents Trust