Parliament tasks gov't to explain high power tariffs
The regulator defended the increment, saying it was due to the depreciation of the Uganda Shilling against the dollar given that several power consumers pay in dollars. FILE PHOTO
What you need to know:
- The company also cited increased investment that is required to wheel power from some power generation plants that government will commission this year.
- According to ERA, the transaction costs for the refinancing Bujagali hydropower plant have been factored in the retail tariff for this quarter hence the increase.
Kampala. Lawmakers yesterday tasked the government to explain the high retail power tariffs in the country despite the President’s promise to make electricity affordable.
Mr Elijah Okupa (Kasilo County) said they had supported the tax waiver to Bujagali hydropower project on account of the government promise to reduce the tariffs to about Shs181.
“We do not want to take it that we were duped into exempting Bujagali from corporation tax. We had been promised that the [tariff would come down]…Can the minister of Finance tell this country what happened,” Mr Okupa asked.
The Deputy Speaker of Parliament, Mr Jacob Oulanyah, interjected: “We waived corporation tax, many months back. Have the [tariffs] come down?”
In response, the State minister of Finance for Planning, Mr David Bahati, promised to furnish the House with an explanation on Thursday.
Without delving into the specifics of government intervention, Mr Bahati said: “The action by Parliament to waive corporation tax was part and parcel of what we are doing to handle Bujagali in relation to the tariff.”
“We have not closed that matter. So I request that I come back here on Thursday and I update the House and the country on this particular issue,” he added.
Exemptions
Between May 2017 when Parliament exempted Bujagali Energy Limited from corporation tax and December, the Electricity Regulatory Authority (ERA) has reduced the tariff at least twice.
However, it has increased the base tariff from Shs696.9 to Shs718.9 this year.
The regulator defended the increment, saying it was due to the depreciation of the Uganda Shilling against the dollar given that several power consumers pay in dollars.
The company also cited increased investment that is required to wheel power from some power generation plants that government will commission this year.
According to ERA, the transaction costs for the refinancing Bujagali hydropower plant have been factored in the retail tariff for this quarter hence the increase.
