Lawmakers order electricity authority to suspend new tariffs

The Electricity Regulatory Authority insists that it will not suspend the tariffs.

The new power tariffs that took effect last week are ‘illegal’ and should be ‘suspended’ immediately, Parliament has said. The Electricity Regulatory Authority (ERA), however, says it will not effect the suspension.

Parliament’s ad hoc Committee on Energy said yesterday that for such tariffs to apply, there should be minutes of an ERA board of directors meeting sanctioning them. The committee is investigating the causes of high electricity tariffs, loss claims by power companies and the open tender system for procuring oil for thermal plants from Kenya.

However, ERA insists that with or without the minutes, it would not suspend the tariffs. “We are not going to suspend the tariffs because ERA, and not Parliament, is mandated by the Electricity Act, 1999 to set and review tariffs,” Mr John Julius Wandera, ERA’s Public Relations Officer, told Daily Monitor yesterday.

Mr Jacob Oboth-Oboth, the chairperson of the committee, said: “ERA has not given the committee solid reasons for the increment. Parliament is composed of representatives of electricity consumers. If ERA ignores Parliament, it would be to its (ERA’s) peril.”

The committee had summoned the authority to explain whether the ERA board had authorised increment of the tariffs just as Bujagali hydropower dam is about to be commissioned, which would result in the decommissioning of the heavily subsidised thermal plants, and hopefully, lower electricity costs.

No minutes
Two ERA officials who appeared before the committee yesterday offered conflicting explanations for the lack of the minutes. Mr Steven Mwandha, the ERA Legal Counsel, said they could not provide the minutes ‘because they have not yet been proofread’, whereas Dr Benon Mutambi, the acting chief executive officer, said: “I have never seen those minutes.”

Mr Mwandha was asked to go and collect the draft minutes from the ERA office, which is 20 minutes walk from Parliamentary Buildings. He took two hours to return, which prompted some MPs to claim the minutes were being ‘concocted’.

Mr Mwandha returned with the ‘draft minutes’, which, however, irked MPs because they (minutes) did not have the names of those who attended the board meeting and were not signed by ERA board chairman Richard Apire.

Dr Mutambi said the implication of implementing Parliament’s directive would be a ‘blackout’ because the generators would ‘switch off’ their plants. “The tariffs are meant to prevent the energy sector from grinding to a halt,” said Mr Mutambi.

The thermal plants were brought in 2005 to bridge the power deficit occasioned by delays in commissioning the 250MW Bujagali power Project. With the commissioning of Bujagali, these thermal plants were to be decommissioned and the money spent on subsidising them channelled to other hydropower projects.

Last week, ERA raised electricity tariffs by between 36 per cent and 69 per cent after the government decided to, partially, do away with the Shs396 billion it was paying to thermal power generators in order to subsidise electricity consumers.

Under the Ugandan new tariff regime, domestic consumers shall pay Shs487.6 up from Shs358.6 per unit, medium industries shall pay Shs458.9 instead of Shs333.2 per unit whereas large industries will pay Shs312.8 instead of Shs184.8 for each unit consumed.

The Director for Energy & Mineral Development, Eng. Paul Mubiru, said: “The Committee can only make recommendations to Parliament which would then discuss them and change them if a resolution is made. But the Electricity Act is clear and makes no provision for tariffs to be taken to Parliament for endorsement.”

nwesonga@ug.nationmedia.com