Umeme calls for more domestic unit discount

KAMPALA. Electricity distributor Umeme has suggested that the government increases the number of discounted units of electricity for households from 15 to 50.

Umeme said this will enable many rural households to start businesses that need 50 units in a month.

Currently, home owners pay Shs150 for each of the first 15 units they consume and Shs685.6 for each unit above the 15.

Mr Sam Zimbe, Umeme’s deputy managing director, said about 100,000 of Umeme’s one million customers would benefit if the lifeline band is increased to 50 units.

“…consider extending that coverage to, say, 50 units, that will cover a wider population,” Mr Zimbe said yesterday in Kampala.

He said this would enable many a household to use electricity to power a refrigerator to preserve some perishable goods for sale.

Mr Zimbe said this during a public hearing, organised by the Electricity Regulatory Authority (ERA), on power utilities’ 2018 tariff review applications.

During the hearing, the Uganda Electricity Generation Company Ltd, Eskom Uganda Ltd, Uganda Electricity Transmission Company Ltd, Uganda Electricity Distribution Company Ltd (UEDCL) and Umeme presented their budgets for 2018.

According to a July 2012 paper by Maria Vagliasindi for the World Bank, for countries with high connection rates, lifeline tariffs offer the advantage of much higher coverage of the poor than other existing targeted programmes.

The report said where access is an issue; lifeline electricity tariffs have been regressive.

The UEDCL’s chief technical services officer, Mr Franklin Kizito Oidu, said those who are capable of paying the full cost of each unit should be excluded from the lifeline units/tariff.

“From our interaction with people out there, they were saying that even those who are capable [of paying the full charge] are benefitting from [the lifeline tariff],” Mr Kizito said.

“The proposal was that those who are capable should not benefit from it at all. So a mechanism should be put in place to…only the designated poor people should benefit from it.”

In its tariff review application for 2018, Umeme proposed an increment of the lifeline tariff from Shs150 per unit to Shs200.

It argued that the 150 has been applying since 2014, thus, given, among other factors, inflation, it is time for review.

ERA board would, within the next 21 days, have decided on the power utilities’ applications for tariff review and set the base tariff for 2018 and the retail tariff for the first quarter of 2018.
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