Govt rejects power tariffs increment

Feb 11, 2008

THE Government has rejected UMEME’s application to increase power tariffs. Last December, the power distributor applied to the Electricity Regulatory Authority (ERA) to increase power tariffs with an aim of “recovering revenue, getting a return on investments and covering power losses.”

By Ibrahim Kasita

THE Government has rejected UMEME’s application to increase power tariffs. Last December, the power distributor applied to the Electricity Regulatory Authority (ERA) to increase power tariffs with an aim of “recovering revenue, getting a return on investments and covering power losses.”

The proposed power rates would see domestic consumers pay sh515.41 from sh426.1 per unit, commercial consumers sh504.89 from sh398.8, while small- scale industries would pay sh505.89 from sh360.7.

Large-scale industries would have to pay sh298.2 from sh187.2, while street lights managers would pay sh512.09 from sh403.

In addition, domestic and commercial consumers would have to pay sh2,000 while small and large-scale industries would part with sh20,000 and sh30,000 respectively per month.

However, ERA and the energy ministry refused to approve the tariff adjustments, saying UMEME should concentrate on reducing energy losses.

“We have come up with a position not to increase the power tariffs. There is no way a consumer can pay higher prices for electricity which is lost. The bulk of the money UMEME is asking for is to cover the losses,” Daudi Migereko, the energy minister, explained.

“UMEME should bring down the losses. As a manager of the sector, it is our duty to make sure we bring down the losses and offer affordable and cheaper power.”

He said the ministry, ERA, security agencies and UMEME were to fasttrack loss reduction strategies.

An ERA source confirmed rejection of the power tariff increments.

“We rejected their application and the decision was communicated to the energy minister. All the reasons given for the increments were covered in the Budget,” the official said.

“However, we have considered the fuel component which has been rising in the world market but this is also covered in the Budget. The consumers were catered for in the Budget.”

UMEME admitted that it lost about 95.29MW during the third quarter of 2007.

The loss is creating doubt whether the firm is committed to reducing losses.

The loss is about 37.37% of the 255MW generated from the hydro-power facilities in Jinja, and the thermal power generated in Lugogo and Kiira power stations.

Already, Ugandans are suffering from the highest power tariffs in the region coupled with insufficient and unreliable power, rendering her goods uncompetitive.

Electricity prices increased twice in 2006 to sh426.1 per unit from sh171.6 in 2005, a situation that has hindered new electricity connections.

UMEME’s Robert Kisubi, said: “Find out from ERA because they make a decision on tariff matters.”

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