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Umeme’s tariff hike public hearing today

By Vision Reporter

Added 13th December 2010 03:00 AM

Consumers have a chance today to defend themselves against Umeme’s proposal to hike power tariffs by 15% a move, if approved, could jolt the impressive economic growth.

Consumers have a chance today to defend themselves against Umeme’s proposal to hike power tariffs by 15% a move, if approved, could jolt the impressive economic growth.

By Ibrahim Kasita

Consumers have a chance today to defend themselves against Umeme’s proposal to hike power tariffs by 15% a move, if approved, could jolt the impressive economic growth.

The power distributor has proposed that domestic consumers pay sh462 per unit, up from sh385.6. For commercial users, including kiosks and shops, Umeme wants them to pay sh455.36, up from the current sh358 per unit.

It also wants small-and-medium industrial consumers to pay sh457, up from sh333 per unit. Large industrial consumers will pay sh321.14, while the cost of street lighting will go up to sh451 from sh385 per unit, if the new proposal is given a green light.

Electricity Regulatory Authority (ERA) has invited all stakeholders for a public hearing at the Imperial Royal Hotel in Kampala starting at 8:30am today.

“You (public) are invited to attend the public hearing in person and you may present your comments in writing or orally during the public hearing,” Benon Mutambi, the acting ERA boss, said.

Mutambi pointed out that his board would meet on December 17 to consider Umeme’s proposals. “In reaching its decision, the authority will take into account the concerns of the public and justifications of the applicants at the public hearing as well as the analysis done by the technical staff of the authority,” he stated.

Umeme has justified the hike in prices to the increment to debt service obligations and increase in the firm’s investments. However, energy experts have called for a need to verify Umeme’s actual investment levels, which it claims to have sunk.

“Umeme was clearly required to provide to ERA with an acceptable loss reduction action plan to ensure that the losses leading to the rebates were properly regulated, but I am not sure whether this has been done,” wondered the expert.

“When Umeme won the concession, it promised to cut the losses within five years of operation. It had also promised to lower the rates. Will it keep its promise, instead of appearing as if the company is on a profit maximisation drive?”

Uganda electricity tariffs are the second highest in the world after Sweden. While it is a well-established fact that the high tariffs are directly related to rampant power thefts and illegal connections, there are other issues which need to be addressed.

The high tariff, energy experts have said, is one of the reasons why there are only about 320,000 domestic consumers in Uganda.

“Umeme has no incentive to curb power losses and this explains why we still have losses at about 36%, which is the highest in the world,” the source said.

“There is a need to review and change the contract for the good of the country.”

Umeme’s tariff hike public hearing today

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