Zesco’s proposal commended
Published On April 6, 2017 » 2318 Views» By Administrator Times » Business, Stories
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By MAIMBOLWA MULIKELELA –
CONSUMER Unity & Trust Society (CUTS) International has commended Zesco Limited’s proposal to raise the threshold for life-line tariffs by about 200 per cent to minimise the effects on domestic users.
Zesco has proposed to peg the life-line electricity tariff at 0.15 Ngwee per kilowatt hour for 300 units from the current 100 units.
As the results about 502,000 households countrywide will be purchasing  300 units of electricity each at K45 if the proposed hike by the power utility company is approved.ZESCO  logo
CUTS centre coordinator Chenai Mukumba noted that the productive sectors and mining companies would still benefit from subsidised electricity due to the power purchasing agreements whereas other sectors would be required to pay cost-reflective tariffs.
“As a country we do need to start moving towards cost-reflective tariffs because we do not have the resources we need to continue to subsidise electricity and if we move towards cost-reflective tariffs we need to make sure that we are all carrying this cost,” she said.
Ms Mukumba said, however, that there are a number of issues that need to be addressed before the proposal was pushed in.
“Firstly, the government is currently undertaking a cost of service study. Ideally this should have been completed first in order to determine the true cost of producing electricity,” she said.
Ms Mukumba said Finance Minister in the 2017 budget address indicated that this was important to ensure that customers do not pay for inefficiencies in producing electricity.
She said the implementation of the move towards cost reflective tariffs needs to be undertaken in a phased manner.
Ms Mukumba said increasing tariffs by 50 per cent on May 1, 2017 will have significant negative effects on the country.
She said the increase should be implemented in a much more gradual manner in order to mitigate the negative effects.
“We will see an increase in the cost of production which will affect the prices of goods and services,” she said.

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