Business

ERA maintains power tariffs for final quarter of year 2023

Eng Ziria Tibalwa Waako, the ERA Chief Executive Officer (CEO) (Photo/Courtesy)

Kampala, (UG): Uganda’s Power Regulator; ERA (Electricity Regulatory Authority) has unveiled new power tariffs chargeable by UMEME for the final quarter (October to December 2023) as the country enters a busy period of the year.

The new power rates were unveiled on Wednesday, October 04, 2023, by Chief Executive Officer (CEO) of ERA, Eng Ziria Tibalwa Waako who revealed that the consumers will pay for the same tariffs as they did in the preceding quarter (July to September) to allow extended power usage ahead of the festive season.

According to the new tariffs, domestic consumers will enjoy lifeline units (first 15 units of the month) that have been maintained at Shs 250, while the units from 16 -80 will remain at Shs 805.

Similarly, consumers who purchase units between 81 to 150 will pay Shs 412 per unit (cooking tariffs) while those above 150 will also remain at Shs 805. For Commercial users, the average unit will remain at Shs 611.8, while for medium industrial consumers, the average unit cost remains, at Shs 461.8.

In the extended power tariffs (below), Large Industrial consumers will pay an average cost per unit maintained at Shs 384 (block 1) and Shs 367 (block 2); while the extra-large consumers will pay Shs 325 (block 1) and Shs 296.2 (block 2).

For street lighting the charge is maintained at Shs 370.

Why the tariffs were maintained?

Mr Julius Wandera, Corporate and Customer Affairs Director at ERA justified the cause of the new tariff noting that the rates stayed due to a slight increase in demand for electricity in the past quarter, despite initially going below the rate that was projected at the start of the year.

He says the Authority foresees a projected demand for power rise in the last quarter as consumption rises during the festive season and thus the need to maintain the tariffs to keep the demand going.

“Electricity demand is expected to grow at an annual rate of approximately 9.14% in 2023. The total energy purchased by UETCL is expected to increase from 5,490.1 GWh projected for 2022 to 5,992.22 GWh in 2023,” Mr Wandera stated.

Speaking of what determined the approved tariffs, Mr Wandera explained that a host of factors, mostly macroeconomic, international prices for fuel, the Exchange rate of Uganda shillings against the US dollar, inflation, Consumer Price Index, Energy Generation Mix and costs were all considered to arrive at a conclusion of the approved rates.

He also explained that the Ugandan Shilling which has appreciated against the United States Dollar, going from USH/USD 3,738.33 on November 30, 2022, to UGX/USD 3,719.04 as of August 31, 2023, also led to the exchange rate’s impact on power cost projections.

“For example, as of August 31 2023, the Uganda Shilling had gained weight against the US dollar from Shs3738.33 to Shs3719.04 in the same period this year. This therefore represents an appreciation of 0.52% from the 2023 Base Exchange Rate,” he said.

Despite initially projecting a swift growth in demand at the beginning of the year, Mr Wandera says this has not been yet realized fully but the Authority is still hopeful that the last quarter of the year will present an opportunity to realise the target.

“We have seen growth but not yet to the level we projected at the beginning of the year. However, most manufacturers are preparing for the festive season. There’s ramping up for power not only for domestic users but also manufacturers. The demand will increase during the festive season and we’re optimistic that the projections will be realized” Mr Wandera explained.

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Under sections 10 and 75 of the Electricity Act, ERA is mandated to determine and approve power tariffs to be charged by service providers this case Umeme Limited. The Authority makes quarterly adjustments to the retail power tariff in consideration of the prevailing economic situation and with input from key players like UMEME, UEGCL, UETCL, and UEDCL



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