Manufacturers want electricity tariffs reduced
Posted Wednesday, October 16 2013 at 01:00
Kampala- The Uganda Manufacturers Association (UMA), which consumes 65 per cent of the power distributed in Uganda, wants its electricity tariffs reduced.
Through a September letter copied to President Museveni, UMA, whose members fall under the medium and large industrial consumers category, said a lower tariff would ensure Uganda’s manufactured goods are more competitive than its rivals.
“At a regional level, Kenya, Uganda’s major industrial output competitor is rolling out a 5,000MW roadmap intended to reduce the cost of power from the current $0.18 to $0.08 per kilowatt hour,” said Mr Amos Nzeyi, the UMA chairperson.
“The foregoing just points at the need to focus on bringing down the cost of power since integration is a reality and industrial output from Uganda must compete against goods including those from Kenya.”
He, however, did not say to what level the tariffs should be reduced.
Large industrial consumers in Uganda presently pay Shs312 per unit consumed compared to the between Shs172.5 and Shs123 that industrial consumers in Kenya pay for each unit.
Just like Kenya’s state-owned distributor, Kenya Power, Uganda’s private distributor, Umeme Ltd, had in 2012 asked for an upward review of Uganda’s end-user tariffs.
The two power utilities argued that they need more money to fund improvements in the distribution networks so as to ensure reliable power supply.
However, both governments refused their respective utilities requests, with Kenya’s deputy president, Mr William Ruto, urging Kenya Power to “find alternative sources of funding” whereas Uganda asked its electricity sector regulator to “continue consulting stakeholders in the sector”.
Since then, Uganda has started constructing two large hydropower projects that could, together, add 788 megawatts to the country’s national grid.
According to an official in Uganda’s Energy ministry, once the 600-megawatt Karuma Hydro Power Plant is commissioned, probably in 2018, electricity consumers will pay about $0.05 for each unit compared to the $0.12 that they now pay for Bujagali’s power.