Power rates are too high
Dec 01, 2010
THE electricity distribution firm, Umeme, has applied for a 15% tariff rise in the first quarter of 2011. Umeme officials attribute the increment to debt service obligations and increase in the firm’s investments.
THE electricity distribution firm, Umeme, has applied for a 15% tariff rise in the first quarter of 2011. Umeme officials attribute the increment to debt service obligations and increase in the firm’s investments.
Uganda electricity tariffs are the second highest in the world after Sweden. While it is a well-established fact that the high tariffs are directly related to rampant power thefts and illegal connections, there are other issues which need to be addressed.
A 2009 probe report on the high electricity cost by the Gen. Salim Saleh team catalogued several irregularities in setting power tariffs, collection of energy bills, and flaws in the process of signing the concession with Umeme.
Since the signing of the concession, there have been contradicting figures on the losses. Is Umeme putting the losses at a much higher figure, to justify higher rebates and price increases?
The concession agreement clearly required Umeme to provide the Electricity Regulatory Authority with an acceptable loss reduction action plan to ensure that the losses leading to the rebates were properly regulated. Has this been done?
There is also need to verify Umeme’s actual investment levels as they claim to have sunk a lot of money in the sector.
There are still problems in meter reading and billing, forcing consumers to pay for what they are not consuming. It appears the meters are calibrated to trip at higher speeds than the industrial benchmarks.
The Government must ensure that electricity is made available to the people at affordable rates. The high tariff is one of the reasons why there are only about 320,000 domestic consumers in Uganda.
When Umeme won the concession, it promised to cut the losses within five years of operation. It had also promised to lower the rates. Will it keep its promise, instead of appearing as if the company is on a profit maximisation drive?
Uganda electricity tariffs are the second highest in the world after Sweden. While it is a well-established fact that the high tariffs are directly related to rampant power thefts and illegal connections, there are other issues which need to be addressed.
A 2009 probe report on the high electricity cost by the Gen. Salim Saleh team catalogued several irregularities in setting power tariffs, collection of energy bills, and flaws in the process of signing the concession with Umeme.
Since the signing of the concession, there have been contradicting figures on the losses. Is Umeme putting the losses at a much higher figure, to justify higher rebates and price increases?
The concession agreement clearly required Umeme to provide the Electricity Regulatory Authority with an acceptable loss reduction action plan to ensure that the losses leading to the rebates were properly regulated. Has this been done?
There is also need to verify Umeme’s actual investment levels as they claim to have sunk a lot of money in the sector.
There are still problems in meter reading and billing, forcing consumers to pay for what they are not consuming. It appears the meters are calibrated to trip at higher speeds than the industrial benchmarks.
The Government must ensure that electricity is made available to the people at affordable rates. The high tariff is one of the reasons why there are only about 320,000 domestic consumers in Uganda.
When Umeme won the concession, it promised to cut the losses within five years of operation. It had also promised to lower the rates. Will it keep its promise, instead of appearing as if the company is on a profit maximisation drive?