Parliament stops new power tariffs

By Moses Walubiri 

Parliament has directed the Electricity Regulatory Authority (ERA) to halt a 47% power price increase which was announced last week.

Legislators on the parliamentary ad hoc committee on energy slapped a moratorium on the implementation of the new power tariffs after officials of ERA failed to produce minutes of the special board meeting, which sanctioned the new tariff regime. 

The MPs also faulted the timing of the hike in power tariffs, which took effect on Sunday last week, saying it was a calculated move to water down the findings of their current probe in the energy sector.

In an animated interface with MPs at parliament, the Acting Executive Director of ERA, Dr Benon Mutambi, was at pains to handle the barrage of questions from legislators who were having none of his justification for the new tariff regime. 

Mutambi told the committee headed by West Budama South MP, Jacob Oboth-Oboth, that government had earmarked sh 417b for electricity  subsidies for the financial year 2011/12, but that these funds had been exhausted by November last year. 

He said government had communicated to them in July last year indicating that the then prevailing electricity subsidies were untenable.

“The increase in power tariffs is a painful compromise since the amount of subsidy requirement for 2011-2012 would be close to sh600b if the old tariffs remained,” he explained. 

Although Mutambi refuted MPs’ claims that Uganda had the second highest tariff in the world after Denmark, ERA’s legal officer – cum – corporate secretary, Steven Mwandha, failed to produce authentic minutes of the board meeting which resolved to hike power tariffs. 

After heated exchanges with MPs Medard Ssegona, Andrew Baryayanga, Elijah Okupa and Roland Mugume who insisted that the decision to hike the tariffs was done ad hoc and therefore “a nullity”, Mwanda said that minutes will be presented at the next ERA meeting on January 25. 

‘Illegal hike’

This resulted into the legislators declaring the new power tariffs illegal since the minutes upon which the tariffs were hiked have not yet been approved as demanded by the Electricity Act. 

“Ugandans under the Electricity Act deserve protection. We want you to stay the implementation of the new tariff until such a time when you not only can justify the increment, but also show that proper procedure has been adhered to,” Oboth-Oboth said. 

However, ERA has vowed to ignore the parliamentary directive, saying that MPs have overstepped their ambit. 

According to ERA’s Public Relations Officer, Julius Wandera, “it is the legal mandate of only ERA to review, revise and set tariffs for the energy sector. Not parliament.”

According to Section 10 (g) of the Electricity Act, it is only ERA that has the mandate “to approve rates of charges and terms and conditions of electricity service provided by transmission and distribution companies.”

Wandera said this can only change if parliament chooses to make amendments in the current Act. 

“By MPs declaring that we should withdraw the new tariffs tantamount to usurping the powers of ERA,” he explained.