ZIMBABWE Law and Practice Contributed by: Nikita Madya and Chantele Sibanda, Wintertons
2.4 Market Concentration Limits There are no concentration limits regarding the per- centage of electricity supply that is controlled in the market by any one entity, as the supply of electricity is still below demand. 2.5 Surveillance to Detect Anti-Competitive Behaviour Section 59 (1) of the Electricity Act gives ZERA the ongoing responsibility for: • monitoring whether electricity services are being provided competitively; • determining whether any electricity service in respect of which prices or tariffs are fixed by ZERA can be provided competitively; and • providing a report on these matters to the minister at least annually. Subject to ministerial approval, ZERA may free a regu- lated service from price or tariff regulation and deter- mine the time and circumstances in which this would be permissible. ZERA also has the power to restrict the introduction of competition in certain areas, or of certain licensees or customers, on either a temporary or permanent basis. ZERA also determines the pre-conditions and any transitional arrangements required in order for a regu- lated service to be offered competitively, which may include codes of conduct, rules relating to access to information, access to the electricity system, and constraints against undue price discrimination in the offering of services. ZERA also has the responsibility to monitor electricity undertakings and markets, and is entitled to require information from licensees, to undertake enquiries and hearings and to establish or contract with an inde- pendent entity to provide monitoring services. Under Section 59 (7) of the Electricity Act, ZERA is obliged to provide evidence to CTC of the presence or possible development of market power in the opera- tion of licensed undertakings or electricity markets.
ZERA also has an ongoing responsibility to consider issues associated with the competitive provision of electricity services and the prevention or mitigation of market power in its decisions and orders regarding matters such as licence applications, the granting of licences, licence terms and conditions, the setting of prices and tariffs, and whether to approve a merger, acquisition or affiliation, among other things. Under Section 59 (8) of the Electricity Act, if ZERA determines that there is any problem related to the development or unfair exercise of market power, it may do the following (with the agreement of the CTC): • issue such cease-and-desist orders as may be required upon the licensee or licensees concerned; • levy monetary penalties upon the licensee or licen- sees concerned; and • refer the matter to the CTC for investigation. 3. Generation Facilities 3.1 Constructing and Operating Generation Facilities The principal law governing the construction and operation of generation facilities is Section 42 of the Electricity Act, as well as the Licensing Regulations. Under Section 42 (1) of the Electricity Act, a genera- tion licence authorises the licensee to construct, own, operate and maintain a generation station for the pur- poses of the generation and supply of electricity, sub- ject to any terms and conditions imposed by ZESA and without contravention of the other provisions in the Electricity Act. In terms of Section 42 (2) of the Electricity Act, the holder of a generation licence may supply electricity to any transmission, distribution or supply licensee who purchases electricity for resale and – with the approval of ZERA – to any one or more consumers, subject to the terms and conditions imposed by ZERA and without prejudice to any other provisions in the Electricity Act. For such purposes and under the terms of Section 49 (3), the “holder of a generation licence” includes any generating company outside Zimbabwe that is enti-
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