ELECTRICITY ACT EU MEETING .pdf



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THE ELECTRICITY ACT NO. 11
OF 2019
by
Emmanuel Mumba (Mr), LLB,AHCZ,CCP
Legal Counsel

THE ELECTRICITY ACT NO. 11 OF 2019
q Chapter One: Key Definitions
q Chapter Two: Salient Provisions
q Chapter Three: Impact and Conclusions

2  

Chapter One: Key Definitions
Ø “base tariff”
means a reference to a retail tariff
determined by the Energy Regulation Board
at the beginning of the multi-year tariff
period.

3  

Chapter One: Key Definitions
Ø “bilateral tariff”
means the tariff at which electricity is sold
under a power purchase agreement or a
power supply agreement, excluding a
retail tariff.

4  

Chapter One: Key Definitions
Ø “Cost reflective” includes—
(a) the recovery of the allowable costs of
each regulated and licensed activity;
(b) charges reflecting any combination of
the fixed, variable or marginal costs of
the generation, network maintenance or
retail and operational segments of the
power system
5  

Chapter One: Key Definitions
(c)

the revenue received from electricity
tariffs covering the full and efficient
operation and maintenance costs.

6  

Chapter One: Key Definitions
Ø “Emergency”
means an occurrence where an unplanned
loss of generation or transmission facilities,
or an occurrence beyond a licensee’s control
that impairs or affects the licensee’s ability
to supply that licensee’s system demand.

7  

Chapter One: Key Definitions
Ø “enterprise” means a company that:
(a)
generates, transmits, distributes or
supplies electricity;
(b) operates a transmission network;
(c) trades in electricity as an intermediary,
as prescribed.

8  

Chapter One: Key Definitions
Ø “open access” means:
“the availability of spare transmission or
distribution capacity to any qualifying
participant on nondiscriminatory terms and
conditions”

9  

Chapter One: Key Definitions
Ø “renewable energy resources” means:
“non-fossil sources of energy capable of use
for the generation of electricity including
wind, solar, hydro, bio-mass and
geothermal”

10  

Chapter Two: Salient Provisions
S.3 : Functions of the ERB
Ø The functions of the ERB under this Act
include the following:
ü secure a regular, efficient, coordinated and
economical supply of electricity and
facilitate universal access to electricity
supply
11  

Chapter Two: Salient Provisions
S.3 : Functions of the ERB
ü approve, review and regulate power
purchase and power supply agreements.
ü approve, determine, review and regulate
tariffs.

12  

Chapter Two: Salient Provisions
S.4: Feasibility Study
Ø The Act has now legislated the process of
feasibility studies whose rights shall be
granted by the Minister.
Ø The period is two years with an option to
renew.
13  

Chapter Two: Salient Provisions
S.5: Prohibitions
A person shall not:
ü generate, transmit, distribute or supply
electricity;
ü trade in electricity as an intermediary;
ü establish or carry on an activity for or related
to the generation, transmission, distribution
or supply of electricity; or
ü operation of a transmission or distribution
system.
14  

Chapter Two: Salient Provisions
S.6: Establishing a Generation Station
Ø C o n s t r u c t i o n a n d e s t a b l i s h m e n t o f a
generating station shall be done in
accordance with this Act (Licensing) if the
plant:
ü is rated at a site where it is to be installed at
a capacity of two hundred and fifty or
more kilowatts for generating, transmitting,
transforming, converting or distributing
electricity;
15  

Chapter Two: Salient Provisions
ü is rated at a site where it is installed at a
capacity below two hundred and fifty
kilowatts and that is used for the
generation, transmission, distribution or
supply of electricity for the use of
another person.

16  

Chapter Two: Salient Provisions
S.7: Application for New Generation
Capacity
Ø A licensee shall obtain the prior written
approval of the ERB where the licensee
requires new installed capacity.

17  

Chapter Two: Salient Provisions
S.8: Application to Expand or Decrease
Rated Generating Capacity
Ø A licensee who is part of an interconnected
system who intends to expand or decrease its
installed capacity shall apply to the ERB for
approval.
Ø The ERB shall approve or reject the
application within 30 days and notify the
applicant within 14 days.
18  

Chapter Two: Salient Provisions
S.10: A System Operator
To operate a transmission network and its
inter-connectors with other networks in order
to guarantee the security of supply of
electricity

19  

Chapter Two: Salient Provisions
S.16:

Sustainability Programmes
Requirement
A licensee shall develop and maintain a five
year sustainability programme which shall be
reviewed on an annual basis, or a shorter
period that may be prescribed by the ERB.

20  

Chapter Two: Salient Provisions
S.17:

Sale or Purchase of Electricity
Outside Zambia
Ø An enterprise or consumer that intends to
purchase or sell electricity outside the
Republic shall apply to the Minister for
approval.
Ø Except where electricity is purchased or sold
on a competitive spot market or is required
for emergency purposes.
21  

Chapter Two: Salient Provisions
S.18:
Declaration of emergency
Ø A licensee can apply to the ERB for a
declaration that the emergency exists.
Ø The ERB shall declare an emergency if
satisfied and as soon as practicable
publish the declaration in the Gazette.
Ø Upon declaration, licensees applies to the
ERB for tariff adjustment.
22  

Chapter Two: Salient Provisions
S.20:

OBLIGATION TO NOTIFY THE
ERB
Ø A licensee A licensee shall inform the
Energy Regulation Board of an accident
within twenty-four hours of becoming
aware of an accident.
Ø Failure to do so is an offence.
23  

Chapter Two: Salient Provisions
S.21:

OBLIGATION TO NOTIFY THE
ERB
Ø A licensee shall report all incidents likely to
affect, or that materially affect, the quality or
availability of electricity within twenty-four
hours of the occurrence of the incident and
submit a written outage report to the Energy
Regulation Board within seven days of the
incident.
24  

Chapter Two: Salient Provisions
S.30: Tariff
Principles of Tariff:
ü Fair, reasonable and reflect the cost of
efficiency
ü Ensure quality of service, predictability of
tariff adjustment, reasonable rate of
return on capital investment
ü Encourage competition
25  

Chapter Two: Salient Provisions
S.30: Tariff
ü Reward efficiency in performance
ü Reflect enforceable standards for the quality
and cost of the supply of electricity to retail
consumers and non-retail consumers.
Note: S.31: A licensee shall not charge a
retail tariff without the
approval of the ERB
26  

Chapter Two: Salient Provisions
S.34:

Multi-year and Annual Tariff
Adjustment

The ERB may approve the retail tariff for the
licensee for a period of up to five years
taking into account the previous base tariff
and retail tariff adjustments.
27  

Chapter Two: Salient Provisions
S.34:

Multi-year and Annual Tariff
Adjustment
The Retail Tariffs shall comprise:
ü A base tariff
ü Pre-determined tariffs
ü A provision for a retail tariff adjustment

28  

Chapter Two: Salient Provisions
S.37:
Minimum Bilateral Tariff
ERB may at any time, on the application of
the licensee, or on its own motion, determine
a minimum bilateral tariff payable by nonretail consumers required to achieve cost
reflectivity.

29  

Chapter Two: Salient Provisions
S.39:
Rights of Consumers
Ø Where the retail consumer enters into a
contract of supply with the licensee, the
licensee shall supply electricity to the retail
consumer within the period as prescribed.
Ø Where the licensee fails to supply electricity
to the retail consumer within the prescribed
time the licensee shall refund the retail
consumer the charges for the supply of
electricity.
30  

erb@erb.org.zm
www.erb.org.zm
Fax: +260-211-258852
Tel: +260-211-258844-9
31


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