Umeme not to blame for current load shedding

Aug 08, 2011

Contrary to what many people believe, Umeme did not replace the Uganda Electricity Board (UEB). Before Umeme came to Uganda in 2005, the national energy sector consisted of only UEB; which generated, transmitted and distributed power to the national grid.

Contrary to what many people believe, Umeme did not replace the Uganda Electricity Board (UEB). Before Umeme came to Uganda in 2005, the national energy sector consisted of only UEB; which generated, transmitted and distributed power to the national grid. This resulted in lack of specialisation and great inefficiency.

In 2001, UEB was unbundled to four companies; UEGCL (Uganda Electricity Generation Company Limited) for generation of electricity, UETCL (Uganda Electricity Transmission Company Limited) for transmission of power to distributors, UEDCL (Uganda Electricity Distribution Company Limited) who are the network owners, Rural Electrification Agency (REA) and the Electricity Regulatory Authority.

In 2005, UEDCL concessionaired parts of its network to three distributors; Umeme, WENRECO (West Nile) and Ferdsult (parts of Western Uganda). In the years that followed, more distributors were admitted. They are; Kilembe Investments Ltd, Bundibugyo Electrive Cooperative Society and Pader Abim Cooperative Society.

As supply dwindled below the expected and agreed levels, some of these parameters were revised. Today, we have three distributors on the national grid: Umeme, WENRECO (West Nile) and Ferdsult (Parts of Western Uganda).

At the onset, certain performance indicators were identified and agreed to, which have been the guiding principle for performance measurement over the years. These indicators were; a) level of investment, b) bringing down energy losses, c) growing the customer base and d) improving collections.

The Current Situation
At the beginning of July, our power supplier, UETCL informed us of a load-shedding schedule as a result of a shortage in generation because three thermal plants were being shut down.

These plants’ shutdown has resulted into a total shortfall of close to 120MW. The plants cited commercial predicaments as a result of non-payment of dues since March 2011 to date.

A distributor can only distribute power that has been supplied. As Umeme, we have decided to minimise public inconvenience by internally realigning our maintenance and project works to ensure that they coincide with the day-time load shedding rota.

This rota is available on our website, www.umeme.co.ug. We also advise customers to report outages that were not within the communicated load shedding schedules to our contact centre for quick and immediate resolution.

Today, dialogue is ongoing to ensure that the impasse that led to UETCL announcing load shedding is resolved and generation restored to the usual levels. The monies owed are to the Independent Power Producers.

A number of our customers, however, have over the last two weeks asked: Where does the money used to pay our utility bills go?

Subsidising your power bill today
The figure reflected on your power bills today are a percentage of the actual cost of producing electricity.
This is because the government has regularly stepped in to maintain a stable end-user tariff.
In the last annual tariff review process conducted at the end of 2010, it was deduced that the actual cost of producing each unit of power was sh697. Government committed to buy this down to sh385.6 by providing subsidies to the tune of sh488b to UETCL for power suppliers.

Setting the tariff:
The power tariffs are set by ERA.
ERA conducts an annual process to review the tariff, which involves all the sector companies named above. All of us submit our annual revenue requirements to ERA, which determines a final tariff basing on all the plans, projections and proposals - including views from the general public.

Demand-supply forecast today
The total demand today is 443MW and the total power produced is averaging between 300-320MW giving a shortfall of 120-140MW.

Of the total power produced, only 180MW is hydro and the rest is thermal. The teams continue to work to ensure that this shortfall burden is fairly shared by all without totally compromising on the overall economic activity in the country and sensitive installations like hospitals.

Still, the cost of hydro power vis-à-vis thermal remains imbalanced as thermal generation is pegged to the cost of oil on the world market which is also traded in US dollars. The strategy by the government to fast-track Bujagali and Karuma hydro plants is the best foot out there for us, given the increasing demand (10%) for electricity.

Steps Umeme has taken to release customer pressure
In 2009, we decentralised operations into 25 districts and six areas in order to increase responses to customer issues and complaints.

We also set up a national contact centre to deal with customer queries in a timely manner, and the difference is significantly positive in a number of ways.

There have been some significant improvements in our service with specific reference to new connections and emergency responses.

The new connections time has been reduced to an average of seven days and emergency response times being reduced to 20 minutes from the time of reporting.

As individual companies and as a sector, we will continually strive to meet the expectations of our customers and the general public, as this is crucial to our attainment of both our business and social objectives.

We will continue to work together to this end.
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