What you need to know:
- Despite the fact that the proposed Bill is likely to reduce the above-mentioned costs, in addition to finding strategies to make the cost of getting a legal connection affordable to the poor, I suggest that Parliament considers strategies to curb the potential for market failure which is likely to be caused by the Bill.
On January 27, the Minister for Energy and Mineral Development Ruth Nankabirwa tabled to Parliament the proposed Electricity Amendment Bill, 2022. Among others, this proposal seeks to set hefty penalties for vandalism and stealing electricity. The spirit with which this proposal was brought is good and indeed, the amendments are wanting.
The cost of vandalism and stealing electricity were well articulated by the minister. Among others, this vice causes load-shedding which is responsible for vast lost economic opportunities among the population that relies on electricity to make a living, for example, industries, local milling machines, barber shops and salons, and welding businesses.
Indeed, stealing of electricity is also associated with loss of human lives, especially during the rainy seasons. Despite the fact that the proposed Bill is likely to reduce the above-mentioned costs, in addition to finding strategies to make the cost of getting a legal connection affordable to the poor, I suggest that Parliament considers strategies to curb the potential for market failure which is likely to be caused by the Bill.
In Uganda, the suppliers of electricity have more information about the product they supply than the consumers. For example, Umeme field officers understand more about the wiring at the meter of the consumers pole than the consumers, in fact the consumer may not even know how the meter looks like since they don’t climb the pole. This situation creates inefficiency in the electricity market because the field officers are likely to take advantage of this situation to engage in corruption, although may not be the policy of the service providers like Umeme. To put this in context, an example is last year around October, 2021, when Umeme implemented an operation to curb vices, including stealing electricity in several districts in Uganda. They took several electricity meters from many households who had legal connections, including mine, claiming they had installed a bypass in the meters. To return these meters, Umeme asked us to pay more than Shs200,000 to their account as a compensation for the electricity leakage. Unfortunately, the consumers did not know what a bypass looks like and were not privy of installing it nor could they prove that they are not the ones who installed the bypass.
So, the main question, which remained lingering on the minds of the consumers, was “who installed the bypass that is being talked about?” Because households are rational, they ended up paying the Shs200,000 to Umeme such that they can have their meters re-installed despite the legality of the circumstance under which the meters were taken. Thus, making the penalty hefty for stealing electricity may make the situation even worse for those households who are penalized when in reality, they did not commit the offence but have no proof. Because, they would prefer to give in to corruption than receive the legal penalty when they can’t prove their innocence. Thus, there is a need to put in place strategies to protect this category of consumers if we are to have efficiency in the electricity market. Among others, we may need to borrow a leaf from the policy requiring police officers to wear bodycams in the USA when they are in operation.
If field officers from electricity service providers (e.g. Umeme) are required to have bodycams that can provide data on their activities while at work to a central location, e.g. Electricity Regulation Authority (ERA); this can help to protect consumers from exploitation by service providers. Second, all field officers for electricity service providers should be required to sign a consent form indicating no ill-intention (e.g. installing a bypass and came back later to claim an illegal connection) before they could do any inspections at the consumers premises and leave a copy with the consumer.
Third, field officers for electricity service providers should only commence inspection after getting the consent of the consumer, which should also be written. Fourth, similar to the meter boxes that are installed by consumers on their buildings, the electricity meters (e.g. yaka meters on the poles) should be required by law to have padlocks where the consumer is the custodian of the key. If these recommendations are implemented, the efficiency in electricity service provision will be enhanced without necessarily making the population accessing electricity legally worse-off and indeed, only those breaking the law will be penalised.