MPs advise government on how to bring down power tariffs
Posted Monday, October 14 2013 at 01:00
Parliament’s Committee on the National Economy wants the government to devise means other than tariffs through which investors would recoup the money they might have spent on electricity projects.
This, the committee says, through a September 2013 report, would bring down the electricity tariffs. “Government should explore ways in which the financing costs can be paid without recovering it from the tariff,” states the report. “This will help to bring down electricity tariffs.”
However, a source in one of the power utilities said as long as the utilities make capital investments in generation and transmission the consumers would have to dig deeper into their pockets.
Alternative to government
“The other alternative is for the government to subsidise the consumers. But last year, the government decided it would rather use the money it would have spent on subsidies on constructing large power plants,” the source said.
The committee’s recommendation comes against the backdrop of assertions that electricity consumers will pay less for the 600-megawatt Karuma Hydro Power Plant power. It also comes amidst claims by some electricity consumers that one year since President Museveni commissioned the Bujagali Hydro Power Plant, electricity tariffs are yet to fall as the government had ‘promised’.
Domestic consumers presently pay Shs524.5 per unit whereas the large industrial consumers pay Shs312 per unit (large industries) following a 36 per cent and 69 per cent increment of the respective tariffs in 2012.
The government said then it had to increase because it was not sustainable to subsidise power consumers on whose behalf it had paid out Shs1.5 trillion over seven years.
Further, the committee urges the Electricity Regulatory Authority, which either okays or vetoes requests by power distribution companies, to always ensure ‘all stakeholders in the energy industry should be consulted before tariffs are set’.