Should the Yaka saga be a source of worry?

Uganda has just discovered that the software in the Yaka meters that the power distributor Umeme uses to calibrate, compute and accept electricity tokens for local distribution will be obsolete in nine months.

So what is being done to remedy the situation?

The government, acting through the Electricity Regulatory Authority (ERA), hopes to use a token identifier (TID) upgrade to clean up the mess. Umeme says this process upgrade is aimed to improve customer vending experience, enhance system security, and electricity token recognition. The power distributor is now carrying out a duo-rollout strategy that will be implemented in an area or district-based approach to minimise the service interpretation.

“A customer shall be informed in time, and those scheduled for the upgrade will receive three tokens by SMS that they should key in the Yaka meter in the order they are received. An upgrade confirmation message shall be displayed once the token loading is successful,” Umeme explained in a notice released January 6.

When will the process be completed?

ERA says by October 2024, there will be no Yaka metering system for any customer.   A disclosure by the manufacturers of these meters, the Standard Transfer Specification Association (STS Association), released on May 22, 2020, makes it clear that they will no longer be able to dispense electricity should the current software on all STS payment meters left not updated for the next four years to the aforementioned software update deadline. The notification states that all STS-based prepayment meters will cease to dispense electricity due to the requirement for an update to each credit token’s unique token identifier (TID), which is encoded into 20 digits.

This information was not known until recently when it was announced that there would only be a few months left to update the software. It was also revealed that there would be a cost to the government given that Umeme’s concession expiry is only 14 months away.

What implications are we talking about here?

If some people’s Yaka metering systems malfunction and stop accepting new tokens, Umeme will take longer to recover all its investments in its domestic electric power distribution. This would raise the company’s buyout amount by the government to its shareholders.

Umeme’s ideal business model is through the use of tariffs. These tariffs are obtained through the Yaka metering systems and are typically used to recover the infrastructure investment the power distributor has made over the course of its 20-year concession.

ERA data shows that over time, these investments have drastically decreased from close to Shs2.6 trillion to roughly Shs848b as of now, which will be solely evaluated by the Auditor General for the actual figure that is exact or close to that.

Umeme’s infrastructure is not owned by the company; rather, it has been established to be owned by the government and the company recoups its investments through tariffs from its clients over its concession while the uncollected amount will be calculated as the buyout to its shareholders.

What is the government’s take on all of this?

For starters, there is no love lost between the government and Umeme. Observers say a squabble between the two erupted after the government claimed that Umeme overcharged industrialists and that there were endless delays in extending power to industrial parks, which affected several investors’ factories. But the latest pain point has not been met with blame-gaming.

“[The software update for Yaka metering systems is] not only in Uganda but a global thing. This problem affects all Yaka meters by the STS Association which are used in many countries and the prevailing ones on the market are all on a base date of 1993, which expires in November this year. It’s not just going to affect Yaka meters but also water meters and those for gas utilities. In fact, all prepaid meters are under that system,” said Mr Julius Wandera, the director of corporate and consumer affairs at the electricity regulator ERA.

“To prevent this problem from happening, we have set for ourselves a target to have all Uganda’s electricity consumers’ Yaka (prepaid) meters migrated onto the New Token Identification System (known as the TID Rollover) by October 2024 to be able to continue purchasing units for their electricity supply seamlessly,” Energy minister Ruth Nankabirwa noted. 

So what next?

Energy minister Ruth Nankabirwa  has cautioned the public about the process, which she says requires utmost cooperation from Umeme prepaid service customers when contacted. However, she adds that this also puts these electricity users at risk of fraudsters, who they should be cautious about.

It is unclear how the ERA, which claims to have alerted its regional counterparts like Kenya and Tanzania about the mayhem it was unaware of, managed to unearth such sensitive information at such a dire time when only a few months are left on Umeme’s concession.

Following a one-year trial in the capital that demonstrated it was superior to post-paid billing, Umeme began rolling out its prepaid electricity metering system in 2011. The system currently serves 1.7 million users, according to the company’s 2022 financial filings. This pre-paid metering system accounts for 95 percent of Umeme’s domestic customers and 34 percent of its revenue.