Power distributor, Umeme, has proposed that the end-user tariffs for domestic consumers be increased starting next year even after raking in free money through inflated projections of some of its costs.
UMEME officials at work during an disconnection operation
If the government accepts the proposal, the price of electric power used in homes will rise from 518.7 shillings to sh 520.7 per unit consumed.
Ugandans pay one of the highest power tariffs in Sub Saharan Africa. Domestic consumers pay a tariff of Shs 518 per KwH, which is $0.19, far higher than the Sub Saharan Africa average of $0.13.
Uganda produces about 800MW of power today, which is shared by less than 15 per cent of the population, far below the Sub Saharan average of 24 per cent, according to the World Bank.
However, according to Umeme’s Tariff Application 2015, which was seen by this newspaper, Umeme does not say why it has asked to be allowed to raise the cost of electricity.
Sam Zimbe UMEME’s General Manager Corporate and regulatory affairs, the proposal is informed by the company’s revenue requirements for 2015 and in its annual tariff review proposed that large industrial consumers should pay Shs 306.7 per unit, down from Shs308.5 which they currently pay while tariffs for commercial consumers be increased from Shs477.4up from Shs472.5 and the tariff for street lighting be reduced from Shs486.9 to Shs480.6 per unit.
In the past, the company has tied the increments on a need to raise money for capital investment in the distribution network. Umeme has also indicated before that higher tariffs would help it meet the power purchase costs.
Umeme’s proposals come about a year since the Uganda Manufacturers Association (UMA) asked the government to help lower end-user tariffs.