10-13-20 by Spotlight Zimbabwe

Powerless: Zimbabweans hit with another electricity price hike

 

Faced with power shortages, Zimbabwe’s main utility hikes tariffs again to discourage consumption. 

Chris Muronzi

Harare, Zimbabwe – In the sweltering late-morning heat, Benjamin Musoro sits on a wooden stool on his veranda in Kuwadzana, a high-density suburb west of Zimbabwe’s capital Harare.

Squinting at the screen on his entry-level mobile, the 71-year-old father of five tops up his account with the Zimbabwe Power Company (ZPC)- the state electricity provider.

When his lights and television set went dark the previous evening, it was a sure sign his balance was negative.

“The cost of electricity is too high,” he told Al Jazeera.

For most of last year, Musoro’s biggest problem stemmed from a lack of available power. Hit by a combination of man-made and natural challenges, the state power company simply could not generate enough electricity to keep up with demand, forcing it to institute blackouts for up to 17 hours a day.

Since last fall, though, routine outages have been minimised to a few hours and only on isolated days, but not because more power is available.

Electricity tariffs in Zimbabwe skyrocketed in October 2019, when the Zimbabwe Energy Regulatory Authority (ZERA) approved an application by ZPC’s parent company – the Zimbabwe Electricity Transmission and Distribution Company (ZETDC) – to dramatically increase tariffs.

The price hike aimed to curtail household power consumption, bring tariffs in line with inflation, and eliminate subsidies the Zimbabwean government can ill afford.

But wages have not kept pace with the country’s blistering inflation. And the squeeze on household finances has now become a stranglehold after the regulator approved another 50 percent tariff increase late last month.

Forcing tough choices

Last year’s rate increase had already forced consumers to make tough choices about how to allocate their precious power usage.

Musoro, who shares his homestead – an eight-room main house and a separate cottage – with four other families, has restricted power use to lights, televisions and refrigerators only.

Cooking, which can lead to a punitive bill totalling thousands of Zimbabwean dollars, did not make the cut.

“We no longer use electricity for cooking here,” he said. “We are struggling to pay 700 [Zimbabwean] dollars for electricity as it is. It’s going to be harder with the [tariff] increase.”

At the official exchange rate, 700 Zimbabwean dollars buys $8.5 (USD).

Zimbabwe is in the throes of a prolonged and festering economic crisis. Inflation running more than 800 percent and foreign currency shortages that have led to stomach-churning currency devaluations have been exacerbated by stagnant salaries that cannot keep pace with soaring prices.

The coronavirus pandemic has only heaped more hardships onto the nation’s financially embattled population.

Teachers in Zimbabwe earn approximately $50 every month. Pensioners receive less than $10 a month.

Even private-sector workers in their prime fret about how they will cope with yet another tariff rise.

Kingston Simbulani, a 46-year-old metal worker, splits the power bill with another tenant in his home. Together, they spend 400 Zimbabwean dollars ($4.83) every month on energy.

“I really can’t afford the new electricity tariffs,” Simbulani told Al Jazeera.

The roots of the crisis

Zimbabwe has been struggling with power shortages since April 2019, when water levels in the Zambezi River dropped sharply due to drought, crippling the country’s biggest hydroelectricity supplier, Kariba South Power Station.

Visitors walk over a bridge as dry cliffs are seen along the parched gorge on the Zambian side of Victoria Falls, Zambia, following a prolonged drought, in December 2019 [File: Mike Hutchings/Reuters]

 After combined power generation levels at Kariba fell from 1,476 megawatts (1.476 million kilowatts) per day to 890 megawatts (890,000kW) in March last year, ZESA started rationing power for the first time in two years.

The power cuts eased in May of this year thanks to improved inflows in Kariba dam, a facility jointly owned by Zimbabwe and Zambia, which led to an upward review of water allocation.

By late September, Zimbabwe was producing 1,240MW of electricity.

But the utility raised rates again, to further discourage power consumption.

Stan Banga, a 26-year-old self-employed youth, rents a room in a single-family house shared with four other tenants in a densely packed suburb of Harare.

Back in 2015, $30 was enough to power the home for a month, he says.

“I used to contribute my share of five dollars [$5] per month at the house I rented. It was easy for me to raise that money then,” Banga told Al Jazeera.

But the country’s economy plunged into crisis last year, replete with speculative attacks on the Zimbabwean dollars.

Immediately after last year’s tariff hike, Banga found himself contributing the equivalent of between $8.88-$13.33 per week in Zimbabwean dollars.

Thanks to the coronavirus crisis, the economic landscape in Zimbabwe has become even more precarious, and Banga is unsure how he can navigate the new rate hike.

“This amount is quite taxing for me, given I am self-employed. It’s difficult and I feel the impact of these on my [disposable] income. The price of power is just too high,” he says.

Caps on consumption

The weight of the burden borne by consumers ultimately hinges on a tiered tariff structure designed to limit household consumption to no more than 200kW of electricity per month – regardless of how many people live in the home.

ZETDC structures tariffs in bands starting with “low end” (lifeline) use, scaling up to “optimal” and “heavy” use. This “stepped domestic tariff” structure, as ZETDC describes it, is designed to promote fair usage by linking the amount a household pays to the scale of power consumption.

Under the low end (lifeline) band consumers pay 73 Zimbabwe cents ($0.009 US cents) per kWh up to 50 kWh – enough to power a two-plate electric stove and five light bulbs for a single calendar month, according to ZETDC.

Under the optimal tariff, consumers pay 1.62 Zimbabwean dollars ($0.019) per kWh. About 80 percent of ZETDC’s customers pay this amount, according to the company.

Households that do not qualify for the first two bands are considered heavy users and are charged as much as 4.41 Zimbabwean dollars ($0.053) per kWh.

The new tariffs are designed to limit households to a maximum of 200kWh of electricity every month.

Sinodia Chiwerere, a vendor in Harare’s Graniteside industrial areas, says that cap is simply divorced from what average households like hers need to get by.

“The tariffs are exorbitant,” Chiwerere told Al Jazeera. “And the 200kWh don’t last at all.”

Chiwerere says she was spending 200 Zimbabwean dollars ($2.43) a month on her share of the electricity bill she splits with another family, despite the household taking energy-saving measures.

“We don’t use electricity for cooking,” she said. “Basically, the energy we are using is only for lights and electrical appliances such as fridges.”

Even with those cutbacks, her household runs through the 200kWh ceiling before the month is out.

“By the 25th of the month, we would have run out of power,” she said.

To bridge the energy deficit to the next month, Chiwerere and the other tenants pay through the nose for any additional energy they can source, such as from private vendors with generators.

Many Zimbabweans have also turned to solar energy to supplement power from the state grid. Solar panels are now mounted on many rooftops all over Harare.

 

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