Government delays higher power tariffs
Posted Thursday, January 3 2013 at 02:00
One more month. A power regulatory official says delay could go on untill end of month.
The government has stayed the increase of electricity tariffs, which was to be effected in two weeks. Officials from the Finance ministry met their counterparts from the Electricity Regulatory Authority (ERA) and agreed to the temporary relief for power consumers in order to allow further consultations.
“The consultations are going on,” Mr John Julius Wandera, ERA spokesperson, told the Daily Monitor yesterday. “They might go on until the end of this month.”
ERA was scheduled to increase tariffs for domestic consumers by 7 per cent, 7.8 per cent (commercial consumers); 1.5 per cent for medium industries; 4.5 per cent (large industries); and 11.7 per cent for streetlights.
On top of the increase, ERA was planning to roll out a new system of computing tariffs every month based on underlying economic data, such as inflation and the exchange rate.
However, the Uganda Manufacturers Association successfully petitioned the High Court in Kampala in December to stay the implementation of the new tariff method, which could see consumers’ monthly bills rise depending on the state of the economy.
Consultations on the new methodology are on-going.
It is not clear how long the tariff reprieve will last. Industry sources say the country will soon have to fall back on the more expensive thermal power, with Uganda Electricity Generation Company warning “surplus energy from the Bujagali plant will soon be exhausted”.
Thermal electricity costs $0.29 (Sh779.5) compared with hydro’s average $0.10 (Sh268.8). Power transmission and distribution companies transfer such costs to the consumers.
Some consumers have also argued that in spite of a previous increment of tariffs in January 2012, there has been no substantial improvement in the supply of electricity and they now face endless power outages, which Umeme attributes to routine maintenance of the network.