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The Energy Regulation Board (ERB) has approved a 70:30 cost sharing mechanism connection fees for consumers as requested by the electricity company, Zesco Limited.
Under this mechanism, consumers would meet 70 percent of the ERB’s determined cost of connection while Zesco would finance the remaining 30 percent.
The board has in addition directed Zesco to implement payment options that would allow consumers to pay connection fees over a 12 month period.
The newly approved charges are; charges for high density, demarcated and reticulated areas (average 436 percent)- 379, charges for low density, demarcated and reticulated areas (average 215 percent)-312 and those in high density un-demarcated areas (average 309 percent)-258.
The approved charges will be effective Janauray1, 2023.
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ERB Board chairperson, Reynolds Bowa said this Monday during a media briefing in Zambia’s capital Lusaka.
Bowa explained that the approved cost sharing mechanism was meant to make connection charges affordable for consumers without being unduly burdensome on the utility.
“Consumers who would pay 50 percent of the invoiced charge based on the new approved rates and must be connected promptly as they had full payment. Consumers who may be classified as vulnerable under the Ministry of Social Welfare criteria may be eligible for assistance with payment of connection fees a scheme to be implemented,” he said.
In addition to determine the approved charges, the Board has in exercise of its regulatory mandate issued orders to Zesco.
These are implementation of approved connection charges to come into effect on January 1, 2022, and develop and implement an optional staggered payment
ERB expected that the new approved charges would also promote the use of efficient, alternative forms of energy of embedding the connection fees within the domestic electricity tariff structures.
On the other side, the ERB has rejected Zesco’s proposal to charge consumers the connection fee in cases where a consumer disputes a standardised quotation.
It has also rejected Zesco’s proposal for annual review of connection charges.
Bowa indicated that ERB going forward has started the enforcement action against Zesco with possibility of imposing administrative penalties as outlined in the enforcement manual.
“ERB will continue to explore ways of balancing utility financial sustainability and consumer affordability,” he concluded.
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