Power grid to lose 40MW CHARLES KIZIGHA Daily News; Friday,October 10, 2008 @20:20 One more of the five independent power projects (IPPs) will fold up business next month, taking away with it 40MW of electricity supply off the national grid, it has been established. Power supply from Messrs Aggrieko will be rendered idle come end of next month when its contract with Tanzania Electric Supply Company (Tanesco) expires -- without prospect of renewal in the next five years. This will bring to 240MW the total of idle power when already foregone supplies from Messrs Dowans and Independent Power (Tanzania) Limited (each capable of supplying 100MW) are added up. Critical supplies from the IPPs will cease according to provisions of the new Electricity Act of 2008, to which the president duly assented on June 6 this year. According to industry sources, one of the provisions of the new law was already frustrating efforts to resolve the countrys power problems. Section 41(7) of the Act says: Any person who, before coming into operation of this Act, had arrangement or agreement with the Tanzania Electric Supply Company Limited (Tanesco) for the generation and supply of electrical energy and in relation to which Tanesco or the government guaranteed the importation of or installation of electrical supply, installation shall not be subject of grant of a licence during a period of 5 (five) years. Under the new law, licences are granted by the Energy, Water and Utilities Regulatory Authority (EWURA) but it is said to have put Tanesco in dilemma when it comes to sourcing power from Dowans and the IPTL and soon Aggrieko. Authoritative sources said that Tanesco could not get permission from EWURA to draw power from Dowans when the country was hit by power deficit recently. Tanesco asked for a legal opinion from the Attorney Generals Chambers only to be told that the AG is there to give advice to the government alone, not institutions. So Tanesco has written to the Ministry of Energy and Minerals they are asking the ministry to seek the AGs intervention on their behalf, the sources said. However, the fate of the IPP has not been conclusively sealed yet. According to our sources, the minister responsible for energy has yet to announce the operational date of the Electricity Act, since some of the regulations were still being worked upon. A senior EWURA official said that the law had simply been assented to by the President, but the minister responsible has to gazette it first before it becomes legally binding. Last month, Tanzanians experienced five days of load shedding when Songas halted three gas turbines, with a total capacity of 106MW for technical reasons. Another 60MW deficit followed immediately after when Tanescos transformer at the Aggriekko plant also developed technical hitches. It has been learnt that Tanesco management and its board have since petitioned the government -- through EWURA for an emergency clearance to use the Dowans gas turbines by evoking the new law. However, the sources add that such petitions could be held back as senior government technocrats fear likely links to what was termed the Richmond scandal, that led to the resignation of former Prime Minister Edward Lowassa. Former Ministers for Energy and Minerals, Mr Nizar Karamagi and East African Cooperation, Dr Ibrahim Msabaha, who previously held Mr Karamagis position also resigned. Currently, Tanesco is unable to tap into a reserve power supply of between 15 and 20 per cent of 680MW demand for averting power rationing.Sources said that the government should have ensured that there was sufficient capacity from the IPPs before introducing the law.