By RUTENDO NGARA
THE Zimbabwe Energy Transmission and Distribution Company (ZETDC) claims it is literally giving consumers free electricity leading to failure to pay suppliers.
Speaking during Zimbabwe Energy Regulatory Authority (Zera) stakeholder consultation meeting on effective service delivery system between 2022 and 2025 yesterday, ZETDC managing director Howard Choga said the power utility was operating at a loss as they import electricity at US$0, 11cents per KWH only to sell it to local consumers for US$0,7 cents before factoring in operational costs among other sundry expenses.
“The cost of internal average purchasing from ZPC is US$0,8 cents, average cost of import is US$0,13 cents, and the average tariff is actually US$0,8 cents.
“When we import for US$O,11 cents and sell for US$0,7 cents, we have not put in any costs there, how do we survive?
“Indexing is not changing as frequently as would be sufficient to track the exchange rate in order to maintain the system.
“As of today, we are already below US$0,7 cents but we are still standing.
“For many years cost effective tariffs we were crying for were US$0,12 cents but circumstances have changed especially through the borrowings that we have to do because of insufficiency of our cash flows, the weighted harvest of capital has affected our tariff requirement.
“Cost effective tariffs are now beyond US$0,15 cents and this is what we require to operate optimum,” said Choga.
He indicated that the distribution company had more than 850 000 clients while 350 0000 are prospective clients who have applied for electricity connections.
He said currently they had no capacity to connect all the people on the waiting list as they were seriously incapacitated.
“When we look at projected demand, we employ very competent mathematicians who use sophisticated methods to focus on what demand will be in the next five to 10 years.
“We already have applications for connections, especially from the mining industry, which require connection in the next three years.
As of now the demand projection from those applications is 2350 megawatts by 2025.
“Look at the demands today of 1800 megawatts, having developed over the past 60 years and now we have a defined demand which has to be developed over the next three years which is two times what was developed over 6o years,” he said.
Choga said to alleviate electricity dependency and importation syndromes, there was a need for the construction of infrastructure that would sustain the projected demand in the next five to ten years.
“Even if you look at the projects on the ground like Batoka, it cannot aggregate to 2 350 megawatts so all the companies or consumers that may want to power consumption.
“Even if they go to 100 percent, it will not go beyond 1000 megawatts of the required 2 350 megawatts.
“The fact is if someone is going to develop their own power source, ZETDC is gladly relieved because if we were going to buy it ourselves, we were going to sell it at a loss.
“If your tariff is sub-economic, for example you have a tuck-shop, you order bread for US$1 and sell it at US$0.50 and still send your child to order more and you are not growing as a business. This is what we are doing.” – Daily News