Umeme Wants ERA to Raise Power Tariffs

Ugandans could pay more for electricity starting January 2015, if Umeme’s latest application to have power tariffs changed is approved.

In an application to the Electricity Regulatory Authority (ERA), which regulates the industry, Umeme wants tariffs for both domestic and commercial use revised slightly upwards.

Domestic costs:

Umeme wants the price for domestic users to increase from the current Shs 518 per unit to Shs 520.7. The charge for the first 15 units a month, consumed by domestic users, could, however, drop from Shs 150 to Shs 100, according to Umemeiacutes application to ERA.

In the application, Umeme said it was unable to give the actual price of power, which means the final charge will be determined by ERA after considering many variables.

“Umeme is unable to provide the actual power supply prices and end-user retail tariff for 2015 that take into account the full power supply costs and other sector costs,” Umeme said.

Commercial users:

For the commercial users, Umeme wants prices revised upwards from Shs 471.8, which was charged in the last quarter of this year to Shs 477.4. Small industries will pay Shs 430.8 while large industries to pay Shs 306.7. Meanwhile, street lights will be charged Shs 480.6, down from 486.2 in the last quarter. In the application, Umeme quotes power losses at 21.6 per cent.

Umeme estimates the exchange rate to be at Shs 2,712 against the dollar. If the shilling weakens, power tariffs are likely to rise since players spend more money to purchase dollars to import machinery. Another key determinant of power tariffs is fuel prices. At the moment, the price of oil is down to $80 per barrel, which should cushion the local power tariff.

Electricity tariffs are subject to quarterly reviews by the regulator. If the latest application is approved, Umeme’s suggestions will be higher than the power cost at the beginning of this year. Tariffs for domestic power were at Shs 520.4 in January 2014, although it was revised slightly down in the third quarter of this year.

Umeme asked ERA to keep the application confidential, but the regulator displayed it yesterday at its headquarters. ERA has invited Ugandans to view the application and will receive comments or objections from the public until December 10.

Source : The Observer

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