National

Power consumers should brace for higher tariffs

Share Bookmark Print Rating
By Fredric musisi

Posted  Sunday, March 16  2014 at  02:00

In Summary

The move will follow implementation of the Automatic Tariff Adjustment.

SHARE THIS STORY

Kampala.

Electricity Consumers will see an increase in tariffs starting April when the Electricity Regulatory Authority (ERA) starts implementing the Automatic Tariff Adjustment (ATA).

ATA is a system that factors in the exchange rate of the local Shilling against the dollar, the fluctuations in oil prices on the international market as well as local inflation levels and electricity tariffs.

The implementation comes in handy with the quarterly review and adjustment of tariffs, which the regulator said would start next month.
Documents seen by the Daily Monitor indicate that ERA had budgeted this year in the tariff, an equivalent of Shs25 billion, to meet the costs for two thermal power dealers, Jacobsen and Electromax.

ERA Chief Executive Officer Benon Mutambi said the two dealers, through Uganda Electricity Transmission Company Limited (UETCL), made a request to allow them operate, though minimally, to prevent their machines from malfunctioning due to redundancy.

But UETCL’s head of communication Kenneth Otim said they received a directive from ERA to start evacuating power from the thermal plants early this year, and also acknowledged the need for the thermal generators to have a minimal dispatch to avoid mechanical problems as a result of redundancy of the thermal generators.
The Jacobsen plant (50Megawatts) is owned by government but was licenced under the Build, Operate and Transfer (BOT) agreement, wheras Electromxx (50 MW) is reportedly owned by business mogul Patrick Bitature under the Build Own and Operate (BOO) model.

Electromax and Jacobsen charge Shs1,000 and 675 per unit respectively.
Monopoly distributor, Umeme, repeatedly last year said current power generated (534MW) against demand (520 MW) is unsustainable and not enough and this pushed government to turn to thermal.

The decision to evacuate power from thermal means that government has to increase end-user tariffs or make a u-turn on the subsidy which was scrapped in 2012.
Documents also indicate that a total of 32,946 kilowatts was purchased from both dealers in January.

Critics have urged government to look at other cheaper energy means other than thermal power or if not, return the subsidy.

The numbers
Shs250
Amount Eskom, the operator of Kiira and Nalubaale dams charge for a unit of power. These power stations supply about 67% of the country’s electrical energy.

Shs300
Amount Bujagali Energy Limited charges for a unit of power. The Bujagali Power Station represents the third most powerful hydroelectric energy source in Uganda.

musisif@ug.nationmedia.com