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Umeme explains new power tariff proposal

By Vision Reporter

Added 1st December 2010 03:00 AM

POWER distributor, Umeme, has explained that it handed over its tariff application to the Electricity Regulatory Authority for review as required by the law.

POWER distributor, Umeme, has explained that it handed over its tariff application to the Electricity Regulatory Authority for review as required by the law.

By Ibrahim Kasita

POWER distributor, Umeme, has explained that it handed over its tariff application to the Electricity Regulatory Authority for review as required by the law.

“The regulatory authority is obliged to review the respective revenue requirements and thereafter determine applicable tariffs,” Charles Chapman, the Umeme managing director, said yesterday.

“For the 2011 tariff review, Umeme submitted a revenue requirement totaling sh215b, translating into a distribution tariff of sh191 per unit. This is only a part of the total end-user tariff, which is determined by the authority.”

According to Umeme, the electricity end-user tariff is mainly driven by the cost of power generation, including fuel, transport and transmission costs, non-Umeme losses and exchange rate variations.

“The distribution price that we have applied for will allow us to maintain the lowest connection costs in the region, improve and expand the network and implement prepayment metering to our customers,” Chapman said.

“While power supply costs and price have increased significantly over the past five years due to the high cost of generation, Umeme’s contribution to the tariff has decreased by 50% over the past five years.”

The firm said the distribution tariff would fund the 2011 priority investment projects like prepaid metering, loss reduction and safety projects, customer service and debt-servicing.

Chapman said they hoped the Government would continue with the subsidies on the power supply price in order to maintain the end-user tariff for domestic consumers at sh385.6 per unit.

“To-date, we have invested over $100m and we plan to inject another $32m in 2011. These investments have already began to pay off and Umeme is connecting more people than ever before,” he said.

Chapman commended the Government for its efforts in increasing hydro renewable generation capacity in the short and long-term to reduce the reliance on the more expensive thermal generation.


Umeme explains new power tariff proposal

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