Stephen Chadenga
Mkoba South legislator John Kuka has called on government to consider charging local authorities non-commercial electricity tariffs arguing that current commercial rates are crippling service delivery.
Speaking in Parliament recently Kuka said councils were not profit making institutions yet they were being charged commercial rates resulting in the local authorities struggling to settle electricity bills despite providing essential public services such as water, sanitation and lighting to residents.
He said non-commercial rates would reduce operational costs and allow councils to channel more funds towards service delivery.
“Local authorities are providing essential services such as water pumping, sewer management and street lighting, yet they are operating under severe financial constraints,”he said.
“Councils are not profit making entities and there is need for government and the Zimbabwe Electricity Transmission and Distribution Company (ZETDC) to consider a special tariff arrangement that allows them to continue delivering critical services without crippling their operations.”
Responding in the National Assembly to the Member of Parliament’s concerns, Deputy Minister of Energy and Power Development, Yeukai Simbanegavi said while councils faced liquidity challenges due to low revenue inflows, the power utility could not afford to subsidise electricity supplies to the local authorities.
“It is true that local authorities are non-profit making organisations and often find it difficult to collect money for services rendered to the citizens, leaving them struggling with liquidity challenges,”Simbanegavi said.
“While this is the case, it has to be noted that these utilities are also also in a recovery mode, where they were recently supported with a cost-reflective tariff after more than a decade of a non-cost reflective tariff.
She said the approved tariff methodology used by the utility requires that tariffs be set at cost reflective levels based on the actual cost of supplying electricity to each customer category.
“Currently ZETDC does not have the financial capacity charge local authorities tariffs that are below cost reflective as there is need to cover the full cost of supplying energy,”she said.
The deputy minister blamed some councils for “excessive” energy losses linked to ageing infrastructure and water leakages and said instead of introducing subsidies councils should adopt energy saving measures.
“During the Urban Councils Association of Zimbabwe meeting held in Kadoma recently, ZETDC extended the offer to local authorities to participate in utility driven advanced net-metering, which would qualify the pumping stations for up to 12 percent tariff incentives,”Simbanegavi said.
“Under the programme local authorities provide way leaves, which is in the form of land for the utility to set up solar system plants at the pumping stations and benefit from the tariff incentives.”
She also said subsidising local authorities would threaten national security and worsen the utility’s financial position at a time councils owed millions of United States dollars in unpaid electricity bills addind that compelling ZETDC to supply power below production costs without Treasury support would weaken the utility’s operations and risk a return to the era of widespread load shedding.
Over the years residents in urban areas have complained of erratic water supply and poor street lighting, which councils blame on high electricity costs and incessant power cuts.