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The Energy Regulation Board (ERB) has approved ZESCO’s application for emergency tariff adjustments, focusing on tariff affordability, load shedding mitigation, and financial stability during the emergency period.
The approval was based on a proposal submitted by ZESCO on October 1, 2024, which requested adjustments for Residential, Commercial and Maximum Demand (MD) customer categories.
ERB Board Chairperson James Banda announced the decision at a media briefing held at the ERB Head Office in Lusaka on Wednesday.
According to Banda, the application followed the ERB’s declaration of an emergency in April 2024, after ZESCO was unable to meet national electricity demand.
“The application aims to address challenges arising from ZESCO’s financial performance and the ongoing load shedding crisis,” Banda said.
The approved emergency tariff structure included reductions for Residential customers in the R1 and R2 categories, but an increase for those consuming more than 200 units.
For Commercial customers, those consuming below 100 units would benefit from a reduction, while an increase applies to those consuming above 500 units.
Similarly, Maximum Demand customers would see a rise in tariffs.
ZESCO’s goal with these adjustments isbto raise US$15 million per month from retail customers.
This revenue would contribute toward the importation of 788 megawatts of power, which is crucial to alleviating the current load shedding affecting the country.
Banda highlighted that the approved tariff changes were intended to protect low-income households and Small and Medium Enterprises (SMEs), ensuring tariffs remain affordable for these segments.
“This measure will provide necessary relief to those most vulnerable while balancing the financial requirements of the utility,” Banda stated.
For Maximum Demand customers, ZESCO’s proposed to eliminate the capacity charge and adopt an all-energy tariff.
This change is designed to give these customers relief, particularly in the productive industrial sectors, ensuring business continuity during the emergency period.
In addition to managing the tariff structure, the ERB and ZESCO hope that the higher tariffs for certain customer categories would encourage energy efficiency.
Banda emphasized that customers were being urged to consider alternative energy sources such as Liquefied Petroleum Gas (LPG) and solar to ease pressure on the national grid.
“This measure aims to channel saved power toward productive sectors of the economy, ensuring business operations remain unaffected by the energy crisis,” he said.
To maintain transparency, the ERB issued a Public Consultation Paper (PCP) inviting feedback from the public on the proposed tariff adjustments.
Banda noted that this process was part of ERB’s ongoing efforts to ensure stakeholders’ needs were considered in critical decisions.
He further said that the approved emergency tariffs would be in place for three months, from November 1, 2024, to January 31, 2025, after which the emergency situation would be re-evaluated.
ZESCO had been instructed to explore alternative revenue sources and adopt financially prudent options for power imports, with an emphasis on prioritizing local power purchases when cost-effective compared to imports from the Southern Africa Power Pool (SAPP).
Banda also directed ZESCO to adhere to the published load management schedule, limiting load shedding to a maximum of 17 hours.
The ERB urged ZESCO to increase public awareness about the emergency power situation and the emergency tariffs.
The adjustments are expected to strike a balance between maintaining affordable energy for low-income households and SMEs, while ensuring ZESCO had sufficient revenue to secure necessary power imports and reduce the impact of load shedding.
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