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Government refuses to raise power prices

By Vision Reporter

Added 24th December 2010 03:00 AM

CONSUMERS should enjoy the festive season without worries of paying higher electricity bills. As such, there will be no rise in power costs as Government injects sh488b in tariff relief to shield consumers from the high power costs.

CONSUMERS should enjoy the festive season without worries of paying higher electricity bills. As such, there will be no rise in power costs as Government injects sh488b in tariff relief to shield consumers from the high power costs.

By Ibrahim Kasita

CONSUMERS should enjoy the festive season without worries of paying higher electricity bills.

There will be no rise in power costs as Government injects sh488b in tariff relief to shield consumers from the high power costs.

“The retail (domestic consumers) tariffs are staying unchanged and the Government is committed to continue subsidising the tariffs until cheaper generation is brought on board,” Simon D’Ujanga, the state minister for energy, said yesterday.

“Bujagali hydropower dam is scheduled to give us the first 50MW in late 2011 and should be fully commissioned by mid 2012.

This will help to reduce the current sector costs by almost a third (of the current price).”

The minister said it was an obligation to ensure that Ugandans have access to cheap and reliable electricity.

Announcing the power tariffs at the Uganda Media Centre yesterday, Benon Mutambi, the acting Electricity Regulatory Authority (ERA) boss, said domestic consumers would continue paying sh385.6 for every unit used.

He explained that commercial consumers like shops, would also continue to pay the sh358.6 for a unit, while small industries will continue paying sh333.2 per unit.

Large industries will pay sh184.8 for a unit. The cost of street lighting will remain at sh364.3 per unit, Mutambi said.

The cost for the first 15 units (life-time tariff) remains at sh100 for every unit. On top of that, consumers will continue paying sh2,000 as the standard service fee.

The announcement followed an application from Umeme and three other firms to raise power tariffs in a bid to recoup their investments.

Other firms, including Uganda Electricity Transmission Company (UETCL), Eskom, Uganda Electricity Distribution Company (UEDCL) and Uganda Electricity Generation Company (UEGCL), also applied for a review of their budgets.

Umeme, the power distributor directly interfacing with consumers, wanted domestic consumers to pay sh462.4, commercial sh455.36, small industries sh457, and large industries pay sh461 for every unit used.

However, the electricity regulator (ERA) convened a public hearing on December 14, where all stakeholders objected to Umeme’s “insensitive” proposal.

Subsequently, the ERA board decided not to increase the tariffs in its 176th meeting, taking into account comments raised in the public hearing.

“We approved the tariffs (after) taking into account the need to keep them at comparable and affordable levels, while ensuring sufficient supply of electricity to meet demand,” Mutambi explained.

“The Government is commitment to continue providing subsidies in the sector. Government subsidies to the electricity sector will increase to sh488b next year, up from sh280b this year.”

ERA pointed out that there was a “notable” improvement in curbing distribution losses, which reduced from an average of 35% last year to an average of 30% this year.

The demand for electricity has continued to register faster growth in 2010 compared to the previous five years (and) demand growth for 2011 is projected at 12% annually,” Mutambi observed.

Uganda has the highest electricity tariffs in the East African region. This has rendered Uganda’s economy somewhat uncompetitive regionally.

Government refuses to raise power prices

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