THE AGENCY REGULATES AN INDUSTRY WITH DYNAMIC PLAYERS
Electricity Regulatory Authority scoops continental accolade
By Benon Ojiambo
In less than two decades, the Electricity Regulatory Authority (ERA) has made its mark not only in Uganda, but on the African continent. This has earned it a nod from the African Development Bank (AfDB).
“I am happy and proud that we made it ahead of South Africa, Kenya, Nigeria and other countries,” said Eng. Ziria Tibalwa Waako, the chief executive officer of ERA. The Electricity Regulatory Index report released recently by AfDB, ranked Uganda’s ERA as the best electricity regulator on the continent.
Uganda was followed by Namibia and Tanzania as the first and second runners-up respectively, while Zimbabwe and the Gambia came last. The report measures the level of development of regulatory frameworks and examines their impact on the performance of their respective electricity sectors.
It covered 15 selected African countries of Cameroon, Ivory Coast, the Gambia, Ghana, Kenya, Lesotho, Malawi, Namibia, Nigeria, Senegal, South Africa, Tanzania, Togo, Uganda and Zimbabwe. ERA was established in 2000 by the 1999 Electricity Act that unbundled the former Uganda Electricity Board (UEB) and formed three successor companies as an independent body to act as the referee to the sector.
The successor companies are Uganda Electricity Generation Company Limited (UEGCL), Uganda Electricity Transmission Company Limited (UETCL) and Uganda Electricity Distribution Company Limited (UEDCL).
Waako told New Vision in an interview that several factors, such as financial independence, development of human capital and government support were responsible for ERA’s great performance. CLICK HERE FOR MORE ON THIS STORY
Private sector produces 70% of Uganda’s power
Eng. Irene Muloni, the Minister of Energy and Mineral Development, attended the 2018 Africa Energy Forum (AEF) in Mauritius. It was on the sidelines of this forum that the African Development Bank released the Electricity Regulatory Index. The index ranked Uganda’s Electricity Regulatory Authority (ERA) as the best regulator in Africa. Benon Ojiambo had a chat with the minister about what the recognition means to the industry and the consumers.
What does this recognition mean?
This recognition means that Uganda’s electricity sub-sector is in the right direction. It emphasises the need for effective regulation that must be in place to develop the energy sector.
As a country, when we embraced liberalisation and privatisation, we needed the private sector to come and participate. After the unbundling of former Uganda Electricity Board (UEB), the Government decided to privatise the generation and distribution segments because of the need to invite the private sector.
If the Government does not have enough money to invest, it looks out to partners to help invest. Once you have the private sector, you need to create a levelled playing field because of the competition.
We are currently the leading country in the region because we have 19 independent power producers generating about 70% of the country’s electricity. This means that the private sector have appreciated the environment that guarantees return on their investments.
This is because we ensured that the legal, regulatory, institutional and the fiscal regimes are all in place. For example, the regulator and financial laws are in place.
Another key factor is the cost-reflective tariff where all costs incurred during delivery of the electricity in generation, transmission and distribution are recovered through the end-user tariff. This makes investment into the sector viable and predictable. We are happy that others shall learn from us. CLICK HERE FOR MORE ON THIS STORY
What ISO certification means for the authority
Having attained the ISO 9001:2015, quality management standard recently, the sky is the limit in terms of what the Electricity Regulatory Authority (ERA) can achieve.
The quality management standard is issued by the International Organisation for Standardisation (ISO), an international standards setting body. According to Dr. Ben Manyindo, the executive director of Uganda National Bureau of Standards (UNBS), this standard does not change many things in an organisation’s operations.
However, it requires documentation of an organisation’s work processes and procedures in accordance with guidelines given by the standard. “Most organisations do not have documented work procedures and processes despite the fact that they have job descriptions,” he said.
“At times, you may find out that there is too much waste in what you do in your processes and procedures. The standard comes to align those bringing efficiency and effectiveness in the organisation,” Manyindo said.
He further stated that the overall benefit of this standard is the efficiency and effectiveness of your services. “Currently, if you are to be deemed a reliable supplier of a world service or production worldwide, you should be able to get the ISO 9001 standard.
This will result in trust and reliability of your output,” Manyindo added. However, he describes the process of getting such a certification as costly, something he says has kept many organisations away. “It costs between $10,000 (about sh37) and $15,000 (about sh55.5m) to get this standard which is expensive for most organisations,” he said. CLICK HERE FOR MORE ON THIS STORY
How continental regulator assessment was carried out
The Electricity Regulatory Index released recently by the African Development Bank ranked Uganda’s Electricity Regulatory Authority (ERA) as the best electricity regulator in Africa. Below are some of the highlights from the report.
The report established that 68% of the regulators’ budgets are approved by the sector minister. Nigeria and Tanzania recorded high scores for independence partly because of the provisions in their respective regulatory acts/laws prohibiting commissioners from accepting a job in the regulated utility after their term of office. In the case of Nigeria, the period is two years, while in Tanzania the prohibition covers the director general, as well as employees of the authority, for a period of eighteen months after the expiration or termination of the term of office.
This covered the ability of the regulated entity or other stakeholders to challenge the regulator’s decision in the courts through an appeal to a commission or a specialised body. Kenya, Uganda and Tanzania recorded high scores because of the existence of specialised independent bodies such as energy, electricity, or competition tribunals, which can be used to challenge or overturn the regulator’s decisions.
This entails full disclosure to relevant stakeholders of key regulatory documents, consultation responses, and regulator comments. Lesotho and Uganda scored the highest marks because these regulators publish explanations and rationales behind all major decisions. For the other regulators, neither reasons nor explanations are provided. CLCIK HERE FOR MORE ON THIS STORY