Claim
The Patriotic Front Facebook page has claimed that the Zambian Government will increase electricity tariffs by17 percent. The page made the claim in a post on August 30 2022. Attached to the claim was the Government Green Paper on the findings and recommendations of the 2021 Electricity Cost of Service Study. This post attracted reactions from people who feel increasing electricity tariffs by 17% is not in line with the 2021 to 2026 UPND Party Manifesto. The manifesto states that one of the deliverables by UPND government is to ensure affordable and clean energy supply through the implementation of an ambitious Renewable Energy Investment Plan that will improve the energy mix and ensuring cost-reflective and steady tariffs that allow investors to continue investing in the sector.
Rating Justification
iVerify Zambia’s fact checking process has determined as misleading the claim that Government will increase electricity tariffs by17 percent. iVerify Zambia analysed the Government Green Paper on the Findings and Recommendations of the 2021 Electricity Cost of Service Study that was conducted from December 2019 to December 2021 and was published on August 30 2022 on the Ministry of Energy website. The study determined that the economic tariffs should increase by an average of 17 percent over the next five years, a recommendation which places a heavier tariff burden on residential customers and subsequently reduces electricity tariffs for Maximum Demand and Power Purchase Agreement (PPA) customers. The study also determined that the country needs to adopt cost reflective tariffs at each voltage level including generation, transmission and distribution tariffs.
However, according to the Green paper on the Electricity Cost of Service study, while Government agrees with the principle of migration to cost reflectivity, it does not support the study recommendations which place a heavier tariff burden on residential customers and subsequently reduce electricity tariffs for Maximum Demand and Power Purchase Agreement (PPA) customers. The Green paper says Government will therefore ensure that there is a reasonable balance between social and economic considerations in the tariff-cost allocation methodology to support different sectors towards economic recovery. It further says Government will also ensure that cost allocation to various customer categories does not affect ZESCO and other utilities’ financial sustainability and that the desired revenue requirements will be attained at all times. “The proposed adjustment in tariffs, if need be, will be determined by the Energy Regulation Board taking into consideration the prevailing economic socioeconomic fundamentals,” adds the Green Paper.
It is therefore misleading to state that Government has increased electricity tariffs by 17% and that Government will increase the tariffs by 17 percent as claimed by the Patriotic Front Facebook Page. ERB is yet to make a decision on the proposed adjustments.
