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Government declares CEC transmission lines common carriers

Filed under: Breaking News,Business |
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The government has declared Copperbelt Energy Corporation transmission and distribution lines as common carrier of electricity.

To this effect, Minister of Energy, Mathew Nkhuwa has signed a Statutory Instrument No. 57 of 2020 under the Electricity Act No.11 of 2019.

“The transmission and distribution lines are declared as common carrier for the purposes of the Act and shall be used on the terms and conditions determined by the Energy Regulation Board(ERB)” Read the Statutory Instrument.

There has been a two-year impasse over the renewal of Bulk Supplier Agreement(BSA) between the CEC and ZESCO.

ZESCO and its biggest electricity off-taker, Copperbelt Energy Corporation PLC (CEC), have failed to reach an agreement on the renewal of the Bulk Supply Agreement.

Government directed ZESCO to apply Cost Reflective Tariffs to all customers.

The BSA commenced on 21 November 1997, between the Government of Zambia, the CEC, and ZESCO Limited to facilitate electricity supply to the mines on the Copperbelt as well as the domestic customers in the mining townships and surrounding areas.

It was initially scheduled to expire after fifteen years in November 2012 but was however further extended to give it an effective twenty-three (23) year life span, ending on the 31st of March, 2020.

On Wednesday 11th October 2017, the then Minister of Energy David Mabumba, announced in Parliament policy measures that were being taken to migrate electricity tariffs to cost-reflectivity for all customer categories including CEC.

The Copperbelt Energy Corporation Plc (CEC), is a member of the Southern African Power Pool (SAPP) and is listed on the Lusaka Securities Exchange.

It is an incorporated power transmission, generation, distribution and supply company and began to develope its own energy infrastructure.

ZESCO has been supplying electricity to CEC at highly subsidized rates for the company’s onward power supply to the mines but at huge profits.

This in turn has had an adverse effect on ZESCO customers who have to pay high electricity tariffs to keep Zesco afloat as its services to CEC are almost at a loss.

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