Umeme’s flat rate rejected
Jun 15, 2010
Consumers have rejected electricity company Umeme’s proposal to charge domestic users a flat fee.
By Ibrahim Kasita and Francis Kagolo
Consumers have rejected electricity company Umeme’s proposal to charge domestic users a flat fee.
The power distributor wants a standard sh12,000 fee for consumers who use between zero and 50 units monthly.
For 51 to 75 units a month, users would shell out sh26,000, whether they consume all the units or not. Above 75 units, a consumer would part with an extra sh386 per unit.
However, consumers at a public hearing convened by the Electricity Regulatory Authority in Kampala yesterday said the proposal was not “pro-poor†and would restrain new electricity connections and the rural electrification programme.
Franklin Ordu, a senior engineer with the Uganda Electricity Distribution Company, said: “The motive is to maximise revenue for Umeme. (But) we cannot charge people for what they have not consumed.â€
Ordu pointed out that passing such a proposal would “cause dissatisfaction†which may “cause an uprising in the country.â€
“How can you force people who have not consumed power at all to pay sh12,000. This will compel some people to request for power disconnection when they are away from their homes and reconnect later when they return,†Ordu noted.
Eng. Moses Murengyezi, a senior energy officer, said the cost of electricity would be multiplied by four if the Government approved the new billing system.
Currently, a poor domestic power consumer, who has no strong electronics, uses about 15 units and pays less than sh5,000 monthly, he said.
If approved, each household which has an electricity connection, would pay at least sh12,000 every month even if it does not consume electricity that month.
In its defence, Umeme said the flat rates would help consumers budget better for electricity and reduce losses by 3%.
Sam Zimbe, the general manager, said the system would also nurture a paying culture and improve revenue collection, which would enable the company provide better services.
In an earlier interview, Umeme argued that the less power lost, the more revenue the company collects and the lower the cost for consumers.
Already, the company said, the tariffs had gone down 10% as a result of reduced losses.
In an effort to meet Government’s request to reduce power losses, Umeme has installed bulk metering in Makerere University, Bugolobi Market and Lira district. This is expected to minimise prolonged interruptions in electricity supply and end the persistent power outages.
The company has also invested about $70m in network rehabilitation.
Reacting to Umeme’s defence, Edward Kigongo, the chairperson of the Electricity Consumers Committee for Makindye Division, said the flat rate would not curb power theft and challenged the company to look for an alternative solution.
Kigongo said it is the rich, mostly businesses, who steal electricity and not the poor domestic users.
He advised the company to immediately roll out a prepaid metering system, which, he said, would curb irresponsible power usage.
Uganda has one of the highest electricity tariffs in East Africa. The prices are categorised as domestic, street lighting, commercial, and industrial consumers.
Domestic consumers pay sh385 per unit. Street lighting costs sh364 per unit, while commercial users pay sh358. Medium industrial consumers part with sh333 per unit and large industries pay sh185.
In Kenya, consumers pay an equivalent of Uganda sh38 for the first 50 units. Subsequent units cost between sh166 and sh345 each. Consumers in Tanzania pay only sh52 per unit, while in Rwanda consumers are charged sh389 per unit.
The Kampala City Traders Association chief, Godfrey Ssali, asked the Government to ensure that power tariffs are in line with other East African Community member states before the commencement of the regional common market slated for July.
Consumers have rejected electricity company Umeme’s proposal to charge domestic users a flat fee.
The power distributor wants a standard sh12,000 fee for consumers who use between zero and 50 units monthly.
For 51 to 75 units a month, users would shell out sh26,000, whether they consume all the units or not. Above 75 units, a consumer would part with an extra sh386 per unit.
However, consumers at a public hearing convened by the Electricity Regulatory Authority in Kampala yesterday said the proposal was not “pro-poor†and would restrain new electricity connections and the rural electrification programme.
Franklin Ordu, a senior engineer with the Uganda Electricity Distribution Company, said: “The motive is to maximise revenue for Umeme. (But) we cannot charge people for what they have not consumed.â€
Ordu pointed out that passing such a proposal would “cause dissatisfaction†which may “cause an uprising in the country.â€
“How can you force people who have not consumed power at all to pay sh12,000. This will compel some people to request for power disconnection when they are away from their homes and reconnect later when they return,†Ordu noted.
Eng. Moses Murengyezi, a senior energy officer, said the cost of electricity would be multiplied by four if the Government approved the new billing system.
Currently, a poor domestic power consumer, who has no strong electronics, uses about 15 units and pays less than sh5,000 monthly, he said.
If approved, each household which has an electricity connection, would pay at least sh12,000 every month even if it does not consume electricity that month.
In its defence, Umeme said the flat rates would help consumers budget better for electricity and reduce losses by 3%.
Sam Zimbe, the general manager, said the system would also nurture a paying culture and improve revenue collection, which would enable the company provide better services.
In an earlier interview, Umeme argued that the less power lost, the more revenue the company collects and the lower the cost for consumers.
Already, the company said, the tariffs had gone down 10% as a result of reduced losses.
In an effort to meet Government’s request to reduce power losses, Umeme has installed bulk metering in Makerere University, Bugolobi Market and Lira district. This is expected to minimise prolonged interruptions in electricity supply and end the persistent power outages.
The company has also invested about $70m in network rehabilitation.
Reacting to Umeme’s defence, Edward Kigongo, the chairperson of the Electricity Consumers Committee for Makindye Division, said the flat rate would not curb power theft and challenged the company to look for an alternative solution.
Kigongo said it is the rich, mostly businesses, who steal electricity and not the poor domestic users.
He advised the company to immediately roll out a prepaid metering system, which, he said, would curb irresponsible power usage.
Uganda has one of the highest electricity tariffs in East Africa. The prices are categorised as domestic, street lighting, commercial, and industrial consumers.
Domestic consumers pay sh385 per unit. Street lighting costs sh364 per unit, while commercial users pay sh358. Medium industrial consumers part with sh333 per unit and large industries pay sh185.
In Kenya, consumers pay an equivalent of Uganda sh38 for the first 50 units. Subsequent units cost between sh166 and sh345 each. Consumers in Tanzania pay only sh52 per unit, while in Rwanda consumers are charged sh389 per unit.
The Kampala City Traders Association chief, Godfrey Ssali, asked the Government to ensure that power tariffs are in line with other East African Community member states before the commencement of the regional common market slated for July.