President Museveni succeeds in amending electricity tariffs to 300shs a unit-a huge milestone.

At a press conference held at the Uganda Media Centre on the Changes to the Electricity Tariff Structure and the Announcement of the Applicable End User Electricity Tariffs For 2022. The Electricity Regulatory Authority (ERA) announced that ERA has made amendments to the electricity tariff structure aimed at promoting access to, and use of electricity.

President Museveni has been pushing for amendment to the electricity taffiff structure so as to benefit the industrial sector but also the domestic consumers. Here are the amendments;

• Introduction of a Declining Block Tariff for Domestic Consumers also codenamed the “Cooking Tariff” aimed at encouraging Cooking with Electricity in homes;
• Promotion of the Productive Use of Electricity in Industrial Parks; and,
• Re-categorization of the Beneficiaries of the Lifeline (Social) Tariff.

The amendments have been made to cater for the current and future needs of the Electricity Supply Industry in effort to reduce the cost of electricity.  The determination of the electricity tariffs for 2022 were based on the following major assumptions:

• The impact of the Covid-19 pandemic on the operations including, energy losses, revenue collection, industrial productivity, and its impact on demand and financial sustainability of the Electricity Supply Industry.
• The Quarterly Tariff reviews implemented by the Authority in 2014, 2015, 2016, 2017, 2018, 2019, 2020, and 2021 that adjust the annual base tariff for changes in inflation, exchange rate, international fuel prices will continue to be implemented in 2022.
• Electricity demand is expected to grow at an annual rate of approximately 11.6% in 2022. The total energy purchased by UETCL is expected to increase from 5,014 GWh projected for 2021 to 5,595 GWh in 2022.
• The average water release at Nalubaale/Kiira is projected at 1,000 Cubic meters per second (cumecs) for 2022 translating into an annual generation of 1,314GWh from Nalubaale/Kiira and 1,434 GWh from Bujagali Energy Limited.
• Isimba Hydro Power Plant, commissioned in March 2019 is expected to generate 966 GWh.
• Karuma HPP is expected to be commissioned in June 2022 and shall be used to contribute to meeting the demand for the forecasted energy.
• West Nile region is expected to be connected to the National Grid effective September 2022.
• The Uganda Shilling has depreciated against the United States Dollar from Ush/USD 3,535.04 used in the determination of the retail tariffs for the fourth quarter of 2021 to Ush/USD 3,564.09 on 30th November 2021 as published by Bank of Uganda. This represents a depreciation of 0.82%. The exchange rate has an effect on the Electricity Supply Industry financing and the resultant Annual Base tariffs for 2022.
• The Authority shall continue to implement the declining block tariff structure for the Large Industrial and Extra-Large Industrial Tariff Year 2022.
• Review of the lifeline tariff structure to target only the deserving low income earners given the objectives of social tariffs. The lifeline tariff is now applicable to the first 15kWHs per month for only customers who consume not more than 100kWH per month.
• Introduction of the declining block tariff to encourage domestic consumers to cook using electricity – between 81kWh and 150kWh.
• Implementation of a pilot direct purchase of electricity by consumers in Buikwe MMP and Kapeeka Industrial Parks at US cents 5/kWh. The projected revenue shortfall of Ush 12 billion in the event the consumers in Buikwe MMP and Kapeeka Industrial Parks do not respond to the tariff reduction by increasing electricity consumption shall be provided by government.

While addressing the press at the Uganda Media Centre, Dr. Sarah Kanabi Wasagali the Chairperson of Electricity Regulatory Authority pointed out that in accordance with Amendment Number Two of the Umeme Limited License for Supply of electricity, the retail tariff charges for electric service shall be subject to automatic fuel cost charges, foreign exchange rate fluctuation adjustment, and an inflation adjustment that will be calculated in accordance with the Authority Quarterly Tariff adjustment Methodology, 2014.  However she pointed out that the approved Annual base end-user tariffs for 2022 which also double as the applicable tariffs for quarter one of 2022 will be subjected to quarterly adjustment factor for hanges in micro economic parameters across the remaining three quarters of the tariff year.

The approved 2022 annual base end-user tariffs are as follows: a.

• Ush 747.5/kWh- Domestic usage,
• Ush 597.1/kWh- Commercial,
• 0/kWh- Medium Industries
• Ush 355.0/kWh- Large Industries
• Ush 300.2/kWh- Extra-Large Industries
• Ush 370.0/kWh- Street Lighting

The above tariffs are only applicable fo the period from January – March 2022.

President Museveni also directed;

• A Preferential Tariff of Ush 451.4/kWh has been approved for institutions starting with the Mwana Mugimu Mulago National Referral Hospital cooking pilot project
• A Preferential Tariff of Ush 412.0/KWh has been approved for domestic consumers for units consumed between 80KWh and 150KWh per month;
• A Preferential tariff for the consumers in the Buikwe MMP and Kapeeka Industrial parks has been approved in which it will now stand at 67 Ush/KWh in peak hours and 178.20 off-peak.

At the press conference the Chairperson of Elecetricity Regulatory Authority on behalf of the board and management thanked His Excellency Yoweri Kaguta Museveni the President of the Republic of Uganda for prioritizing the Energy Sector and for his relentless support to the Electricity Supply Industry that has seen the achieve the noted improvements. 

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