Government wants to cut electricity charges
Apr 30, 2009
The Government wants to bring down electricity prices by 50% in a bid to lower the cost of production and make power affordable for the masses.
By Ibrahim Kasita and Ismael Kasooha
The Government wants to bring down electricity prices by 50% in a bid to lower the cost of production and make power affordable for the masses.
“We are re-examining the current electricity tariffs and my target is to reduce the prices by half,†energy minister Hillary Onek said while commissioning the sh13b power line in Kibaale district last weekend.
“As Government, we want to reduce the cost of power so that the rural people can also afford to get connected to power,†he explained.
“We are re-evaluating the electricity charges to enable increased productivity for Prosperity-For-All.â€
Uganda has the highest power tariffs in the East African region. Domestic consumers pay sh62 per unit for the first 15 units after which it goes up to sh426 per unit.
However, the power rates don’t reflect the actual cost because the Government pays about sh174 per unit for every consumer.
In Kenya, consumers pay sh38 for the first 50 units. The subsequent units are categorised into three groups and rank between sh166 and sh345 per unit. Consumers in Tanzania pay only sh52 per unit while in Rwanda consumers are charged sh389 per unit.
The high power prices in Uganda are attributed to reliance on expensive thermal generation coupled with an increase in the price of diesel as the economy fights inflation.
In a separate interview, the minister said the Government is planning to audit power firms to establish the true cost of their investments, which he said had been the source of skyrocketing electricity prices.
“We want to know how much they have invested because this has been the basis for tariff increments. The Auditor-General will audit them and once it is established that the investments claimed are not correct, power tariffs should come down.â€
Asked for a comment, UMEME’s public relations officer Edward Twine said UMEME does not set the electricity tariffs. “Tariffs are determined by the Electricity Regulatory Authority (ERA).â€
Efforts to get a comment from ERA and the Uganda Electricity Transmission Company were futile.
Fred Kabagambe-Kaliisa, the permanent secretary in the energy ministry, explained that without the Government subsidies, consumers would pay sh700 per unit.
“There is need to look at the true cost of providing the service and evaluate if it is reasonable and affordable if the subsidies are removed,†he told The New Vision.
“The important issue is to stabilise power supply and quality by evaluating new sources of electricity generation.â€
Uganda generates 150 megawatt of thermal power to the national grid, another 150 megawatt from the hydropower plants in Jinja and almost 30 megawatts from the small hydropower dam at the Kilembe mines.
The Government wants to bring down electricity prices by 50% in a bid to lower the cost of production and make power affordable for the masses.
“We are re-examining the current electricity tariffs and my target is to reduce the prices by half,†energy minister Hillary Onek said while commissioning the sh13b power line in Kibaale district last weekend.
“As Government, we want to reduce the cost of power so that the rural people can also afford to get connected to power,†he explained.
“We are re-evaluating the electricity charges to enable increased productivity for Prosperity-For-All.â€
Uganda has the highest power tariffs in the East African region. Domestic consumers pay sh62 per unit for the first 15 units after which it goes up to sh426 per unit.
However, the power rates don’t reflect the actual cost because the Government pays about sh174 per unit for every consumer.
In Kenya, consumers pay sh38 for the first 50 units. The subsequent units are categorised into three groups and rank between sh166 and sh345 per unit. Consumers in Tanzania pay only sh52 per unit while in Rwanda consumers are charged sh389 per unit.
The high power prices in Uganda are attributed to reliance on expensive thermal generation coupled with an increase in the price of diesel as the economy fights inflation.
In a separate interview, the minister said the Government is planning to audit power firms to establish the true cost of their investments, which he said had been the source of skyrocketing electricity prices.
“We want to know how much they have invested because this has been the basis for tariff increments. The Auditor-General will audit them and once it is established that the investments claimed are not correct, power tariffs should come down.â€
Asked for a comment, UMEME’s public relations officer Edward Twine said UMEME does not set the electricity tariffs. “Tariffs are determined by the Electricity Regulatory Authority (ERA).â€
Efforts to get a comment from ERA and the Uganda Electricity Transmission Company were futile.
Fred Kabagambe-Kaliisa, the permanent secretary in the energy ministry, explained that without the Government subsidies, consumers would pay sh700 per unit.
“There is need to look at the true cost of providing the service and evaluate if it is reasonable and affordable if the subsidies are removed,†he told The New Vision.
“The important issue is to stabilise power supply and quality by evaluating new sources of electricity generation.â€
Uganda generates 150 megawatt of thermal power to the national grid, another 150 megawatt from the hydropower plants in Jinja and almost 30 megawatts from the small hydropower dam at the Kilembe mines.