Power tariffs to rise
Jan 02, 2006
ELECTRICITY users should brace themselves for yet another rise in tariffs early this year, The New Vision has learnt. Every year in March, new electricity tariffs are released by the Electricity Regulatory Authority (ERA). The power tariff review by ERA has already kicked off.
By Ricks Kayizzi
ELECTRICITY users should brace themselves for yet another rise in tariffs early this year, The New Vision has learnt. Every year in March, new electricity tariffs are released by the Electricity Regulatory Authority (ERA). The power tariff review by ERA has already kicked off.
In March last year, the ERA announced a new power tariff structure, which saw domestic consumers paying sh212.5 per kilowatt hour (kWh), up from sh171.4. Commercial establishments were required to pay sh204.4 per kWh from sh164. Rates for medium scale industries were raised from sh150.3 per kWh to sh178.9, while large-scale industries’ rates were raised to sh71.9 from sh60.4 per kWh.
The cost of street lighting also rose to sh201.5 from sh162.5.
Dr Frank Sebbowa, the executive director of ERA, said all indications are that power tariffs would go up this year as the economy fights inflation, which affects prices of power components being imported by the electricity generators and distributors.
“In October last year, we allowed Umeme to make a minor tariff adjustment in order to meet the increase in operational costs as a result of fluctuation in the foreign exchange rate and inflation,†he said.
Sebbowa said, “Since then, the inflationary situation has not improved. We expect them to make another request for a tariff change any time.â€
In October 2005, Umeme increased the power rates by a moderate sh3 after filing a request with ERA.
According to a 20-year concession the firm signed with the Government to run Uganda’s power distribution network, Umeme is supposed to be compensated if there is a rise in their dollar costs and inflation, which is done through a moderate increase in power tariffs.
Umeme imports most materials from South Africa, UK and Tanzania.
Dr Sebbowa said, “The recent trends in the world economy, which have seen prices of diesel shoot up, do not help the situation. Uganda also depends on thermal energy, which is produced using heavy-duty diesel. Aggreko Investments Plc, the thermal energy producers, will also need to offset their costs.â€
He said the persistent increase in loadshedding was one of the indicators that there is a bigger need for investment into the power sector.
“People should expect such changes in the tariff structure as our investors try to offset the heavy capital investment put into the electricity grid,†Sebbowa said.
Thermal generation has also increased revenue requirements for the sector due to a large amount of diesel needed.
However, Sebbowa stressed that Umeme, or other power generators and distributors. had not yet made a request for a tariff adjustment.
ELECTRICITY users should brace themselves for yet another rise in tariffs early this year, The New Vision has learnt. Every year in March, new electricity tariffs are released by the Electricity Regulatory Authority (ERA). The power tariff review by ERA has already kicked off.
In March last year, the ERA announced a new power tariff structure, which saw domestic consumers paying sh212.5 per kilowatt hour (kWh), up from sh171.4. Commercial establishments were required to pay sh204.4 per kWh from sh164. Rates for medium scale industries were raised from sh150.3 per kWh to sh178.9, while large-scale industries’ rates were raised to sh71.9 from sh60.4 per kWh.
The cost of street lighting also rose to sh201.5 from sh162.5.
Dr Frank Sebbowa, the executive director of ERA, said all indications are that power tariffs would go up this year as the economy fights inflation, which affects prices of power components being imported by the electricity generators and distributors.
“In October last year, we allowed Umeme to make a minor tariff adjustment in order to meet the increase in operational costs as a result of fluctuation in the foreign exchange rate and inflation,†he said.
Sebbowa said, “Since then, the inflationary situation has not improved. We expect them to make another request for a tariff change any time.â€
In October 2005, Umeme increased the power rates by a moderate sh3 after filing a request with ERA.
According to a 20-year concession the firm signed with the Government to run Uganda’s power distribution network, Umeme is supposed to be compensated if there is a rise in their dollar costs and inflation, which is done through a moderate increase in power tariffs.
Umeme imports most materials from South Africa, UK and Tanzania.
Dr Sebbowa said, “The recent trends in the world economy, which have seen prices of diesel shoot up, do not help the situation. Uganda also depends on thermal energy, which is produced using heavy-duty diesel. Aggreko Investments Plc, the thermal energy producers, will also need to offset their costs.â€
He said the persistent increase in loadshedding was one of the indicators that there is a bigger need for investment into the power sector.
“People should expect such changes in the tariff structure as our investors try to offset the heavy capital investment put into the electricity grid,†Sebbowa said.
Thermal generation has also increased revenue requirements for the sector due to a large amount of diesel needed.
However, Sebbowa stressed that Umeme, or other power generators and distributors. had not yet made a request for a tariff adjustment.