How power outages starve small businesses

Fred Ssalongo, a barber in Kyaliwajjala Trading Centre, Wakiso District, says he makes on average Shs50,000 a day from clipping men’s hair.

Of that, Shs8,300 covers a day’s rent for the space he uses to conduct business. Shs2,000 covers one day’s prepaid electricity units.

Of late, he has also started factoring in his expenses the cost of fuel for a diesel generator.
Where Ssalongo would buy three prepay units of electricity, he has to buy four litres of diesel.

With each litre of diesel costing Shs3,000, Ssalongo ends up spending Shs10,000 more on powering his barber’s shop on a day when there is a power outage.

For one month now, power outages have been punctuating supply. Some of the outages are transient, lasting for a few seconds.
Blackouts, on the other hand, go on for minutes, and in extreme cases, hours. On rare occasions they could even take days. The third type of outage is a brownout, symptomised by the dimming of lights when more electrical appliances in houses are switched on.

To explain the current outages, this newspaper spoke to some of the players in the power supply chain.
Bujagali hydropower plant’s general manager, Mr John Berry, says the plant is operating well, and, thus, is not the source of the faults causing the outages.

“I suggest you speak to UETCL [the Uganda Electricity Transmission Company Limited] and ERA [the Electricity Regulatory Authority]. They would know better,” Berry adds.
Bujagali hydropower plant generates about 50 percent of the electricity fed to the national grid.

We blame it on the rain?

UETCL’s chief executive officer, Mr William Kiryahika, attributes the outages to rain. Rain, he says, conducts electricity.

Therefore to protect electricity users from electrocution and the electrical gadgets from damage, many electricity feeders are programmed to automatically switch off power supply during either downpours or storms, Mr Kiryahika, an engineer, says.
However, that explanation does not explain why supply to some of the areas being rained on is not interrupted whereas to others it is.

The reason, says an engineer who requests not to be named to speak freely, is that the areas that do not experience outages even when it rains have durable poles or quality assets.
“It could also be that the power lines in the unaffected areas are either strong or they were recently rehabilitated,” the engineer adds.

Last year electricity distributor Umeme announced that it would spend Shs7.8 billion to replace 9,000 power poles on electricity distribution across select districts in the country, including Mityana, Kampala, Mbale, Nakaseke, Ntungamo and Bubulo.

The poles, the distributor said, were over 28 years old and rotting. Electricity users in Ntungamo District had then spent days without electricity after a number of poles fell, cutting cables and disconnecting supply in the process.

As of December 2015, Umeme managed an 18,000 - kilometre long low voltage distribution line that connected electricity to an estimated 810,923 consumers, which should since have increased.
Before the promise to replace poles, Umeme had in 2012 considered plans to replace the wooden poles with concrete ones, with Umeme’s managing director Joseph Katera then observing that it had become costly to sustain the use of wooden poles.

He said the company was incurring huge expenses in procuring creosote, the chemical used in treating the wooden poles. Mr Katera said then that the delay in shifting to the use of concrete poles had been due to the fear that it could be more expensive than wooden poles, which fear he said had dissipated after realising that concrete poles were ideal in the long run because they last longer and do not deplete forests.
Before 2012, Uganda’s then constrained demand for electricity exceeded generation capacity.

Consequently, the distribution utilities rationed electricity supply to many areas. In extreme cases, some areas could go for 48 hours without electricity supply.

But following the commissioning of the 250–megawatt Bujagali Hydropower Plant in October 2012, power generation and supply exceeded Uganda’s demand, and then there was supposed to be a surplus.

So, the authorities announced, that marked ‘the end of power rationing’.

Unfortunately, power outages seem to have picked up from where power rationing stopped. And many an electricity user is voicing their displeasure.

According to the February 2017 Consumer Complaints Report by the Electricity Regulatory Authority (ERA), 22.2 percent of the 63 consumer complaints the authority received were about service interruption, up from 21 percent the month before.

Relatedly, though it came earlier, the National Small Business Survey Report 2015 says that 33 percent of the micro, small and medium enterprises (MSME) in Uganda experience power outages lasting upwards of five hours.
The report says electricity outages are one of the constraints to the growth of MSMEs.

The victims

Mr Richard Sserwadda, a miller in Lubaga, Kampala, says his mill processes 100 kilogrammes of maize flour every six minutes.
In other words, for every hour electricity is off, his output is reduced by 1, 000kg of flour.
Most of the interruptions in power supply catch him, like many others, unawares.

Section 77 (7) of the Electricity Act, 1999, provides that the licensed power distributor will inform consumers – 24 hours early – of planned outages.

Umeme, the major power distribution company does this, through advertisements in newspapers, some radio stations and, of recent, the social networking sites Twitter and Facebook.
But then, there are also unplanned outages, which Umeme takes, albeit understandably long, to inform the consumers about.

ERA has now drawn up quality of standards for the electricity supply industry, which require utilities to inform consumers about unplanned outages within two hours of their occurrence.
ERA says it will monitor compliance starting July.

Still on the subject of power outages, Section 77 (8) of the Electricity Act entitles electricity consumers to prompt, fair and adequate compensation for loss sustained.

The rider, in sub–section 9, is that the compensation can only be paid where a consumer lodges a written claim with the distributor.
The claim must be filed within six months of one learning of the act that gave rise to the claim for which compensation is being sought.

A tribunal determines the matter
We could not pose this and other questions to Umeme since the company is “reluctant to reignite media attention”.
Umeme’s stakeholder relations manager, Mr Stephen Ilungole, though urges customers whose power supply is interrupted to immediately get in touch with Umeme.

“Our technical team is on standby and ready to respond to these emergencies,” Mr Ilungole said. “Our customers should bear with us as we attend to the faults.”

One of the long term solutions that some experts in the field have in the past suggested to reduce power outages to the minimum include investing in insulated cables.
Such cables would minimise contact between water, falling tree branches and the electricity cables.
And that would minimise the chances of short circuiting incidents.

Mr Ilungole says Umeme would be happy to undertake ‘any form of investment that would ensure the customers enjoy a world–class experience’.

“But you know for sure that ERA approves every bit of our investments,” he added.

ERA’s manager consumer and public affairs, Mr John Julius Wandera, says the regulator is mindful of the impact of amounts utilities invest in the network on electricity consumers.
“The regulator welcomes continued investment in strengthening the network,” Mr Wandera says.

“But the investments come at a cost; they end up in the tariff. In other words, the consumers would have to pay for it.”

Suggestions on curbing outages
In 2014, ERA’s then director of technical regulation, Ms Ziria Tibalwa Waako, articulated the various ways utilities could reduce the prevalence of power outages.

Through the 2014 in-house newsletter, Ms Ziria, who is now ERA’s chief executive officer, suggested that the utilities should continuously upgrade their electricity systems to keep pace with better technologies.

She said they should install animal guards around ground – mounted electrical equipment to protect against short circuits caused by animals.

Ms Tibalwa further suggested they install lightning arresters around the installations to provide a harmless path [for the lightning charge], which cause electrical surges, from the installation to the ground.

Whatever amount Umeme and Bujagali get regulatory approval for to invest in power distribution and generation, they are entitled to 20 and 19 per cent return on investment, respectively.

Back to Ssalongo, whenever he uses a generator, he increases the charge per customer from Shs3, 000 for a haircut to Shs 4,000 to cover the extra expenses on energy.

“I could have charged Shs2, 000 more but that would scare away many prospective customers,” Ssalongo says.

On his part, Mr Sserwadda says some medium-sized factories could consider buying 500–kilovolt generators to use whenever there is an interruption in electricity supply.
“But they would need fuel.”