Umeme wants lifeline tariff increased to Shs200
What you need to know:
- The lifeline tariff is the tariff that homeowners and shopkeepers pay, in Uganda, for the first 15 units, or in the case of Kenya, for the first 50 units one consumes.
- Should the regulator nod to Umeme’s proposal, 973, 623 domestic customers (home and salon owners and shopkeepers) will part with Shs50 more for each of the first 15 units.
Kampala. Power distribution company Umeme Uganda Limited has proposed an increment of the lifeline tariff from Shs150 per unit to Shs200.
It argues that this will reduce the gap between what the consumers pay and the cost Umeme incurs to distribute the electricity.
The projected average indicative distribution price for 2018 is Shs288.
Increasing the lifeline tariff is one of the proposals Umeme has proposed in its Annual Tariff Application for 2018.
The Electricity Regulatory Authority (ERA) manager consumer affairs John Julius Wandera said ERA has received Umeme’s application.
Mr Wandera said the public has 15 days to go through the application at ERA’s head office in Kampala.
Those who cannot make it to the head office can download the softcopies, which ERA has uploaded on its Website.
“ERA shall schedule a public hearing at which the masses will be free to comment on all power utilities tariff applications for 2018,” Mr Wandera said on Wednesday, November 15.
“After the hearing, ERA’s board of directors will meet to decide on which proposals in the applications to approve.”
For Umeme, should the board approve the increment of the lifeline tariff; Umeme will collect Shs2.9 billion, up from Shs2.1 billion, from the lifeline tariff.
Aside from the lifeline tariff, each domestic consumer pays Shs3, 360 service fees, monthly.
According to the World Bank’s Role in the Electric Power Sector report, the lifeline tariff is meant to allow low-income earners to consume a minimum block of power at a subsidised rate.
The report adds that “low prices give rise to excessive demands, by undermining the revenue base, reduce the ability of utilities to provide and maintain supplies…”
It remains to be seen how, should the lifeline tariff be increased, electricity consumption patterns will change.
