It has been roughly 7 months ever since ZESA introduced the stepped tariffs structure. The beginning of August last year saw the introduction of the framework of the stepped tariff by ZESA. This basically meant that different unit ranges had different unit prices. The categories are 3 namely, 1 to 50 units, 51 to 200 units and 201 units and above. The crux, they said, is to discourage excessive use of power and to reward conservative users. Since the introduction of this framework, tariffs were only hiked once (by 200%) beginning October. Thus the tariffs have remained the same despite ZESA having indicated they would review them monthly. It has been 5 months with the same tariffs which have now been reviewed upwards effective the 1st of March.
The New Tariffs
The first 50 units will now be charged at ZWL$0.49 per unit (formerly ZWL$0.41). The next 51 to 200 units will now be at ZWL$1.08 per unit (formerly ZWL$0.91). The next 201 units and above now cost ZWL$4.61 per unit (formerly ZWL$3.87). This upward review constitutes a 19.02% increase. ZESA rationalized its move to hike tariffs by saying that they took into account macroeconomic fundamentals e.g. exchange rate and inflation.
The Cost Implications
With the previous cost structure, it meant that your first 200 units were costing ZWL$157. Now that the tariffs have been hiked your first 50 units require ZWL$24.50. Your next 150 units now cost ZWL$162. Your first 200 units will require that you pay ZWL$186.50.
A Recap Of What The Stepped Tariffs Framework Means
There was a lot of confusion pertaining to this subject last year. Even to this very day many people still have the wrong perception of what the stepped tariffs are all about. First of all, the first 50 units are lowly priced because it is referred to as the lifeline tariff. This is meant to cushion low-income earners so that they can at least maybe power a 2-plate stove and some lights. Typically, most households can manage to go through the month on 200 units or even less. There is, of course, debate on this but it is a fact though. It is usually not possible for many households because they have tenants in their households. Once you have tenants it can be very difficult to live on 200 units per month. If you are just a single family in a household it is very possible to use 200 units per month or even less. Let me do yet another recap on the issue of when to buy electricity because many people still do not get it:
You Do Not Necessarily Have To Buy On The 1st Of The Month
Well, you can if you want but it does not mean that if you buy on any other day the cost is different. Here is the thing, with the recently introduced tariffs, we have established that your first 200 units now cost ZWL$186.50 right. Your first 200 units in a month will cost that amount whether you buy the electricity on the 1st or the 15th or even on the final day of that month. One other thing to bear in mind is that you do not necessarily have to purchase the 200 units at once. Suppose you first buy 100 units, then later you buy 50 units then you buy another 50 units later. So long it is in the same month, the cost of your first 200 units will still be the same (in this case ZWL$186.50, effective 1 March). One who buys 200 units at once and one who buys 200 units in bits and pieces will both pay the same – just as long as it is in the same month. I am sure that is clear now because it has been grossly misunderstood especially by landlords and tenants.
Why The Focus On 200 Units?
In case you are wondering why I am referencing 200 units a lot, the reason is simple. Once you exceed 200 units in the same month the cost becomes extremely high. From 201 units and above a unit will now cost ZWL$4.61, let us do some simple math. Your first 200 units will cost ZWL$186.50. Suppose you want to purchase a further 200 units within the same month. Those extra 200 units will cost ZWL$922. I am sure you can notice why it is critically important to stick to just 200 units and nothing more. The amount you would have used to purchase your first 200 units can only buy 40 units once you exceed the 200 units mark.
Generally, the hiking of tariffs is never welcome but this time around ZESA did not steeply hike their tariffs. Their last tariff hike was by 200% whereas this time is just by 19%. That is somewhat reasonable though most people still experience load shedding (a problem that still persists). The new tariffs are coming into effect on the 1st of March. If you had not purchased up to 200 units this month, today and tomorrow are an opportunity for you to buy the balance before March begins and the new tariffs set in.
