Blackouts are expensive to manage - ERA

Tuesday January 8 2019

Ziria Tibalwa Waako,  Electricity Regulatory

Ziria Tibalwa Waako, Electricity Regulatory Authority chief executive officer  

By Christine Kasemiire

We have had seven black outs in three years. Is this true?
Unfortunately yes but lots of efforts are being undertaken to avoid a reoccurrence for the same cause.

What is the problem?
Vandalism of the transmission infrastructure and sudden failure of a large generating unit at one of the large power stations.
Another one was caused by the sudden shuttering of surge arresters at Uganda Electricity Transmission Company Limited (UETCL).

During these black outs, how much power is lost?
During a blackout, no power is being generated therefore, no power is lost. However, the direct effect is loss of electrical energy hence interruption of business for all consumers for the duration of the blackout, and its direct impact on the economy.

How much money has been spent correcting the causes of blackouts?
From last year’s incident, expenditure of more than Shs1.2b is required to re-install the five power evacuation towers in Kivuuvu village, in Nama sub-county in Mbalala, Mukono District that resulted into the most recent countrywide power blackout.

What solution aside from sensitisation do you think will address this challenge?
UETCL has installed a pilot transmission line and substation monitoring system in sections of high risk transmission lines. Unfortunately, the area where the vandalism took place was not in the pilot.
This project is being evaluated for a possible roll out on the entire transmission system once a few challenges observed in the pilot have been rectified.

Additionally, amendment of the Electricity Act to include more punitive measures against vandalism of electricity infrastructure will address the blackouts attributed to vandalism.
You say more is needed to be invested to have reliable power and increase accessibility, what are the key areas that need urgent improvement?
Grid expansion and densification which means that connection of more customers to the existing grid. Upgrade from wooden structures (poles) to steel that lasts longer.

Replacement of ageing equipment such as transformers that have lived their useful lives and are now obsolete as well as grid protection upgrades and automation to speed up restoration times are some of the urgent investment areas.

I have heard about the Energy Rebate policy, how does this work and how long does it take, under the policy, to compensate a person?

The Energy Rebate Policy is a mechanism for customers to recover costs invested in approved line extensions as part of customer connections.
The policy benefits industrial customers in the categories of medium (low voltage 415V), large (High voltage 11,000V or 30,000V, with maximum demand exceeding 500kVA) and extra-large (High Voltage 11,000V of 30,000V, with maximum demand exceeding 1,500kVA and dealing in manufacturing).

Customers will now be able to recover costs of the infrastructure established for as long as it benefits other customers in the area.
The move was adopted to encourage customer-funded line extensions and avoid delays from utility scheduling (and budgets) in response to customer energy needs.

The infrastructure is transferred to the utility company upon commissioning. Therefore, maintenance of the network remains the responsibility of the utility company.

Is every cost covered for compensation in the rebate policy?
Rebates do not cover costs of way-leaves, financing costs and the risks of cost variation from approval are borne by the customer. The costs approved by ERA may include costs of materials, labour and transport.

On a monthly basis and for the given month, the licencee will reimburse a portion of the approved Energy Rebate to cover the total energy bill of the eligible applicant for the month.
An Energy Rebate account under this guideline shall remain operational for a period not exceeding 36 months from the first month the customer is billed for energy use.
After 36 months, the rebate account will be closed and the customer shall be liable to pay 100 per cent of the energy billed from then onwards.
Any investment amounts not recovered within the 36 months shall be forfeited and shall not be recoverable by the customer.

How many large consumers have taken up this policy or how many have claimed for refunds?
The policy is still at the early stages of implementation. So far, engagements have been held with industrial customers in some regions and a country-wide sensitisation drive targeting customers in their different umbrella bodies is being organized.
Arising out of the initial engagements, large industrial customers have expressed interest and submitted their applications.

We have applications from Steel and Tube, Watoto Ministries and East African Roofing. These will be reviewed and assessed for viability.
Some have gone as far as acquiring forms to initiate the process. However, no application has been received so far but we are hopeful that the policy will pick up and facilitate the growth in demand.
Umeme is processing the applications for submission for ERA’s approval.
How will it benefit government work load in the energy sector?

When it fully kicks off, the Energy Rebate is expected to improve efficiency in the Electricity Supply Industry by eliminating delays from utility scheduling in response to customer energy requests.

What ear plans on exporting electricity

Surplus power is a recurring worry. One of the solutions is to export the power. What would be the way forward if other countries also try to sell power to us just as we plan to do?
We are making all effort to ensure that all the power generated is consumed internally. Basing on the annual demand and supply trends, we anticipate optimal utilization and quite possibly a supply shortage by 2027.

Ugandans are made to pay private companies whether or not we utilise the power. Do you think Uganda is in a position to negotiate better deals and shift from the take or pay agreements?
With the current generation capacity, Uganda is less desperate. If the trend is maintained, we shall achieve that shift sooner.
What is important is to maintain a proper risk sharing mechanism to sustain the current good investment climate.

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