Power tariffs unlikely to change

By Edward Kayiwa

The unit cost of electricity is likely to remain unchanged in 2014, despite a recent application by power distributor Umeme to have the power charges raised.

According to Patrick Mwesigwa, the director of finance at the Electricity Regulatory Authority (ERA), the tariff is mainly derived from prevailing economic conditions such as inflation, the exchange rate, fuel prices and water, all of which have been stable for the last six months.

“There is no indication that the tariff will be increased although the decision will be made by the regulator who is our board of directors,” he said.

Mwesigwa was speaking at a public hearing organised by ERA in Kampala, as required by electricity Act 1999 which mandates the authority to hold public hearings in case of any application so as to promote transparency, fairness, objectivity and a participatory approach in decision making.

“We are here to look at issues that will be crucial to the regulator in determining a tariff in 2014. None of the sector players has the mandate to set the tariff,” he said.

This was in response to recent speculation that Umeme was due to set new charges for the electricity. According to Umeme’s application, commercial consumers will be required to pay sh52.8 and mid-sized companies’ sh41.6 above the prevailing rates, should the application be approved.

However, the company did not give reasons for the proposal to increase power tariffs. Mwesigwa, however, commended Umeme for reducing losses made on consumption and said the body should now work even harder to hit a 3% further reduction projected for 2014.

“Umeme had a target of 23% reduction of losses on consumption, however, those losses should be 20% in 2014.” Umeme’s general manager for corporate and regulatory affairs, Sam Zimbe, said the company is to make additional investments of up to $50m which would be invested in increasing network reliability and load growth, expanding the network and ensuring loss reduction.

The Uganda Electricity Distribution Company which is the sole buyer of bulk electricity from generation plants sells power to distributors for between 191.79 and 248.99 per unit