If you recall there were widespread complaints regarding the recent electricity tariff hikes. Apparently, ZESA has decided to ‘reduce’ them following those complaints. Tariffs were reviewed upwards effective 1 October as follows:

Take Note: The amounts in brackets are the result of factoring in the Rural Electrification Agency (REA) levy – 6 per cent.

Consumption Band: 1 to 50 kWh (or units)

Under this one, the cost of 1 unit is now ZWL$1.63 (ZWL$1.73).

Consumption Band: 51 to 200 kWh (or units)

1 unit now costs ZWL$3.27 (ZWL$3.47).

Consumption Band: 201 to 300 kWh (or units)

A single unit now costs ZWL$8.17 (ZWL$8.66).

Consumption Band: 301 kWh and above

From the moment you exceed 300 units, 1 unit costs ZWL$10.28 (ZWL$10.90).

A Look At The New Developments

The 3 New Bands

From the previous tariff structure, there used to be a band spanning from 301 and above. Last time it had been reviewed up to ZWL$10.28 (ZWL$10.90) per unit. According to the new structure, there is now a tariff band spanning from 101 to 200 units, 301 to 400 units and 401 units and above. This effectively means that there most expensive tariff band will now be 401 units and above.

Here is a breakdown of the new structure:

Consumption Band: 1 to 50 kWh (or units)

Under this one, the cost of 1 unit is now ZWL$1.63 (ZWL$1.73).

Consumption Band: 51 to 100 kWh (or units)

1 unit now costs ZWL$3.27 (ZWL$3.47).

Consumption Band: 101 to 200 kWh (or units)

1 unit now costs ZWL$5.73 (ZWL$6.06).

Consumption Band: 201 to 300 kWh (or units)

A single unit now costs ZWL$8.17 (ZWL$8.66).

Consumption Band: 301 to 400 kWh (or units)

1 unit here costs ZWL$8.39 (ZWL$8.89).

Consumption Band: 401 kWh and above

From the moment you exceed 400 units, 1 unit costs ZWL$9.80 (ZWL$10.39).

Let me break that down for you, it means:

The first 50 units now cost ZWL$86.50

The next 50 units now cost ZWL$173.50

The next 100 units now cost ZWL$660

The next 100 units now cost ZWL$866

The next 100 units now cost ZWL$889

Let me also outline the new tariffs structure in US dollar terms. They are as follows:

The first 50 kWh cost US$0.016 per kWh (unit)

The next 50 kWh (51-100kWh) cost US$0.03 per kWh (unit)

The next 100 kWh (101-200 kWh) cost US$0.06 per kWh (unit)

The next 100 kWh (201 to 300kWh) cost US$0.086 per kWh (unit)

The next 100 kWh (301 to 400kWh) cost US$0.09 per kWh (unit)

For 401kWh and above it is US$0.10 per kWh (unit)

Remarks Worth Noting

ZETDC Recently Issued A Notice As Follows:

“ZETDC would like to advise that it has revised the domestic prepayment tariff structure from four to six stepped tariff structure to give customers more buying options. Customers who bought prepaid electricity tokens on the old stepped tariff structure before this adjustment to six steps “will be credited the difference in due course.”

Remarks By The Minister Of Energy And Power Development

Minister Soda Zhemu had the following to say, “Power imports are a function of available internal generation capacity versus demand. Our internal power generation averages 1200MW against a demand profile of 1400Mw. Our imports, therefore, range between 150 -200mw. This is also dependent on availability. There are times when exporters are not producing enough hence not sending to the power pool. We are servicing the debts that are current with Eskom.”

The Energy minister also has the following to say when asked to comment, “ZESA had indicated that it wanted to absorb their running cost, that’s why they were granted tariff increases. But, consumers were not happy about the tariff increase and they raised a complaint. So, they appealed and the regulator, ZERA ordered ZESA to revise downwards its tariffs. You can imagine ZESA is importing at US$0.10 but wanted to sell at US$0.19. So, the regulator reviewed downwards the tariff.”

Remarks By ZERA CEO

The CEO of the Zimbabwe Energy Regulatory Authority, Mr Eddington Mazambani said, “What happened is that we had to cap the maximum domestic tariff to an equivalent of US$0.12/kWh. The tariffs were agreed upon after wide consultation.”

Let Us Discuss…

This new tariff structure is actually somewhat weird because of a couple of things. As I demonstrated above it means the cost of electricity has actually gone up. This is against what ZETDC and ZERA are saying that the tariffs have gone down – it is all just technical jargon on closer inspection. Let me show you:

Under the old tariff structure, the first 200 units were ZWL$607

Under the new tariff structure, the first 200 units are now ZWL$920

That is an increase of ZWL$313

Under the old tariff structure, the first 300 units were ZWL$1473

Under the new tariff structure, the first 300 units are now ZWL$1786

There is an interesting thing I observed though. Let us look at the higher tariff bands:

Under the old tariff structure, if you bought 100 units beyond the 300 units mark that would have needed ZWL$1090.

Under the new tariff structure, if you buy 100 units beyond the 300 units mark that will cost you ZWL$889.

I also observed that unit cost for the 101 to 200 units band is separated from the 201 to 300 units band by ZWL$2.60. The 301 to 400 units band is separated from the 401 units above band by ZWL$1.50. This essentially means that it will not be that painful to consider stepping into the 401 units and above the band.

The reason why I find this funny is that it goes against the grain of why they ever introduced the stepped tariffs structure in the first place. Remember that it was meant to discourage excessive consumption of electricity. When the higher tariff bands become cheaper that actually encourages more power consumption. In essence, the tariff bands people have been endeavouring to stick to all along are now the most expensive. In summary, this brings into the question the efficacy of ZESA’s new tariff structure.