UMEME could lose power deals

By Alfred Wandera

The Electricity Regulation Authority (ERA) has warned that Umeme stands to lose concession agreements if it does not agree to the new terms to check inefficiencies in handling electricity losses.

The ERA acting chief executive officer, Benon Mutambi, said they were writing new regulations that would guide the utility body that is in charge of power distribution.

He made the remarks yesterday while appearing before an ad hoc committee of Parliament investigating the energy sector,

Mutambi said Umeme’s concession agreement signed in 2005 with the Government only involved the energy ministry, ignoring ERA, which is the eventual regulator.

He said lack of their input in the final draft of the concession left many errors that are now biting hard on Ugandans.

“The guidelines we have are investment verification, but we want to change them to investment approval and verification guidelines. We will put in place a network forum where various stakeholders will be represented to verify the claims made by the utility company,” he said.

Mutambi’s remarks followed reports that ERA only verifies what Umeme claims, but has no capacity to carry out independent investigations due to financial constraints.

“ERA uses information given to them by Umeme and verified by auditors paid by Umeme. That is the same information ERA relies on to set tariffs. This is why Ugandans complain of high tariffs that are fixed by Umeme and rubber-stamped by ERA,” said Kyankwanzi Woman MP Ann Maria Nankabirwa.

The chairman of the committee and West Budama South MP, Jacob Oboth, said Ugandans were suffering high power tariffs because of ERA’s failure to execute its mandate.

This was after Mutambi said out of the 115 power metres that were sampled in Wandegeya, 32% were faulty.
In ERA’s report to the committee, Mutambi said the only remedy to power losses and high tariffs would be the use of the prepaid billing system.

“We know that there are incentives in the concession that are making Umeme reluctant to roll-out the prepaid billing system. We are following up with Umeme to ensure that the system rolls out to the whole country,” said Mutambi.

He said if the subsidies were removed, the power distribution business would remain lucrative for Umeme because there was substantial profit to be realised.