Electricity losses rise to 18%

Umeme’s energy losses for the period ended December 31, 2021 surged from a decrease registered in the period ended December 2020, according to the electricity distributor’s financial results.

In details contained in the company’s financial results, Umeme noted that energy losses for the year stagnated at mid-year levels of 18 per cent compared to 17.5 per cent in 2020. 

This was a regression from the 16.4 per cent that Umeme had registered for the same period in 2019. 

“Covid-19 restrictions on movements as directed by the government impacted our ability to execute our loss reduction plan,” Umeme said, noting that “we appreciate government support in the drive to reduce and curb power theft, which it said recently had become a serious problem impacting most of its operations.  

“We believe stronger penalties, as proposed in the Electricity Amendment Act, shall act as a deterrent against vandalism of network infrastructure and illegal electricity usage. We have rolled out a revised strategy to reduce energy losses to sustainable levels,” Umeme said.

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In 2021, government, under Electricity Regulatory Authority had required Umeme to reduce energy losses from 16.6 per cent to 13.79 per cent, failure of which the electricity distributor would be penalised. 

Over the years, President Museveni has blamed Umeme over failure to reduce energy losses, which is a cost challenge for the electricity sub-sector. 

Early this month the chairman of the Parliamentary Natural Resources Committee, Mr Emmanuel Otiam Otaala, told Daily Monitor that they had finalised deliberations on the Electricity Amendment Bill, noting that the Bill will among others seek to make theft of electricity energy and vandalism of electrical equipment an  expensive affair to deter the vice. 

Mr Selestino Babungi, the Umeme managing director, early this year said that in 2021 alone, the electricity subsector had lost more than Shs26b in stolen copper wires, vandalised transformers and poles, among others.

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This in a way contributes to an increase in energy losses, which the power sector, partly blames for the failure to bring down electricity tariffs.

Under the amendments, the Bill proposes that any person who taps cables or service wires, tampers, damages or destroys an electricity metre with the intention of interfering with the accurate metering of electricity, commits an offence and is liable, on conviction, to a fine or imprisonment not exceeding 10 years or both.

The offender shall also be required, in addition to the above punishment, to pay 10 times the cost of consumed electricity if it is below 10 kilowatts or pay 20 times the cost if the consumed electricity exceeds 10 kilowatts.

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Last Friday, Mr Peter Kaujju, the Umeme head of communications, said they had launched countrywide operation against suspected electricity theft, executed through illegal connections, noting that there was need to rid the network of illegal users and operators. 

Electricity sales       

During the year, Umeme noted, there was an increase in electricity sales, which grew by 10 percent to 3,507 Gigawatts per hour from 3,201 Gigawatts per hour in 2020, which was higher than the 6 percent registered during pre-Covid years. 

The growth was, Umeme said, driven by increased industrial demand at 11.5 percent from new and existing customers, 9 percent from medium and commercial customers and 6.5 percent from domestic customers.

“There was increased consumption of power by existing and new customers during the year due to improved distribution system stability because of continued capital investments and improved economic environment following the lifting of restrictions,” said Umeme.