Uganda’s Power regulator, the Electricity Regulatory Authority (ERA) has conducted an annual public hearing aimed at getting views in the process to determine 2023 power tariffs.
Engineer Ziria Waako Tibalwa the ERA Chief Executive Officer says, in the Fourth Quarter of the year ending 2022, the Authority received applications for review of Tariffs and Budget for the Year 2023, from Five (5) Licensees, namely: Uganda Electricity Generation Company Limited (UEGCL), Uganda Electricity Transmission Company Limited (UETCL), Uganda Electricity Distribution Company Limited (UEDCL), Umeme Limited and Eskom Uganda Limited.
In the applications, the Licensees presented Tariffs for the year 2023; to cater for the expansion of an upgrade of the Distribution Network, to ensure System Reliability, refurbishment of Electricity Generation Plants, investment in new technologies to ensure Quality of Service and Supply, staff skills development, reduction in Energy Losses and safety of Electricity Customers.
Eng. Ziria says, electricity companies presented a UGX 2.2 Trillion shillings budget to the power regulator (ERA) which the authority among others will consider to set electricity tariffs for 2023.
Engineer Ziria Waako giving her opening remarks at the 2023 Anual Tariff Review Public Hearing
She added that the public hearing gives an opportunity for the public to participate in the tariff review process and to make their views and suggestions on the applications.
On the same note, ERA board chairperson Dr. Sarah Wasagali Kanaabi explained that before coming up with tariffs, ERA considers the reasonableness of the costs, ensures transparency in the formulation and review process, consideration of government policies and any other matters among others.
“This is the opportunity for the public to participate in the process and it should be used appropriately. However, it is the board that will take the final decision,” the board chair said.
She added that “For now, I cannot say whether the tariff is going to lower or not because there are a number of considerations that we put across to determine”.
Dr Wasagali condemned the rampant vandalism of electricity infrastructure and described the act as economic sabotage and added that it takes the country backwards.
ERA Board Chairperson Dr. Sarah Wasagali Kanaabi (left) with Engineer Ziria Waako Tibalwa the ERA Chief Executive Officer
Jickens Miiro the acting finance manager at Uganda Electricity Transmission Company Limited (UETCL), presented its revenue requirements for 2023 worth 1.5 trillion shillings.
However, UETCL is under a multi-year tariff regime, which includes 2024 and 2025. In its tariff application, therefore, the company asked for 1.64 trillion shillings for 2024, and 1.66 trillion for 2025.
He described the vandalism of electric towers as a nightmare for the company.
“When one tower falls, it goes down with five others and the solution to curb it, the company is going to resort to IT or tower protection system to monitor the infrastructure,” he revealed.
Miiro added that the challenge is however the capacity to swiftly respond if vandalism is detected.
Below Is a Full UETCL 2023 Full Tariff Application Presentation
UETCL 2023 TARIFF APPLICATION PRESENTATIONEskom Uganda Limited
Eskom also presented its tariff review application with a revenue requirement of 101,226.21 per megawatt per hour.
However, the application for Eskom is three months, ending in March 2023 because its concession agreement will end in March. The company will then hand over the assets to the asset owner which is UEGCL.
While making the presentation, the Eskom Finance Director, Stephen Byaruhanga highlighted that the company does not expect to make any new investment during this period.
He noted that over the 20-year period the company has operated in Uganda, an investment worth USD 52 million had been made.
Below Is a Full Escom 2023 Full Tariff Application Presentation
ESKOM (U) LTD 2023 TARIFF APPLICATION PRESENTATIONUmeme Limited
Umeme was also represented by Mr Blessing Nshaho who also presented its revenue requirements in its tariff application for 2023, amounting to 648.783 billion, and the distribution price of 168 shillings per kilowatt hour.
According to Nshaho, there has been a double-digit consumption growth in domestic, commercial, medium – industrial and large industrial customers.
He added that a reduction in Energy Losses to 17.1% resulted in increased GWh sales and loss-reduction activities resumed following the re-opening of the economy.
“Umeme piloted the use of CSR and Rolled out CSR and community partnerships to address losses and safety records in low-income areas. We had a strong quarter-on-quarter improvement in losses and 3 Month Moving Average of 16.3% vs 17% year-to-date,” he explained.
He finally concluded that Umeme is receptive to the amendments and will participate in the development of necessary regulations and guidelines to implement the Act for the sustainability of the sector.
Below Is a Full UMEME LTD 2023 Full Tariff Application Presentation
UMEME LTD 2023 TARIFF APPLICATION PRESENTATIONUganda Electricity Distribution Company Limited (UEDCL)
UEDCL was represented by its Chief executive officer Ms Jackline Kiwanuka and Mr Paul Mwesigwa – the company’s managing director.
According to UEDCL’s Presentation, the low-voltage network grew by 26% and the medium-voltage network by 9%.
Customer base – cumulative customer count – 96,969 (6,951 new connections). Distribution transformers – increased by 435 to a total of 3,221.
Power availability – recorded average availability of 92%
Mwesigwa says Public safety campaigns were conducted, staff and contractors’ training were conducted, and continued to support out the growing scheme with 28 out growers and approx. 344,400 eucalyptus trees.
“Disposal of recovered poles from the network – a recycle method was introduced during the year allowing farmers to reuse the poles strictly for fencing. The company incurred an actual energy loss of 25% plus an 18% evacuation loss. This was attributed to 9 mini dams on our network,” he added.
Mwesigwa added that ERA approved target was 20.1% with an approved budget of UGX 8.4 billion.
Below Is a Full UEDCL 2023 Full Tariff Application Presentation
UEDCL 2023 TARIFF APPLICATION PRESENTATIONUganda Electricity Generation Company Limited (UEGCL).
The company owns Nalubaale and Kiira Hydro-Electric Power stations, with an installed capacity of 180MW and 200MW respectively.
In 2003, UEGCL concessioned out the operation and maintenance of its power stations to Eskom under a 20-year Concession and Assignment Agreement (CAA).
Under the CAA, UEGCL has the right to bill Eskom for; Debt service, Depreciation, Return on Equity and Administrative costs.
In its Tariff Application and budget for Nalubaale and Kira For FY23/24, UEGCL says, the company needs to cover Staff Costs of over Ugx 21.1bn, expected to support shared costs with 32% funding.
Administrative Costs – Ugx 24.7bn, all these in line with the current Eskom O&M costs.
CAPEX – Ugx 12bn, to undertake projects that Eskom was unable to do given the timing close to take over. They would not be able to recover these from the tariff.
Return on Equity – Ugx 73bn
• As benchmarked from the CAA at 10% of NA
• Funds needed for capital investment/plant overhauls
Below Is a Full UEGCL 2023 Full Tariff Application Presentation
UEGCL 2023 TARIFF APPLICATION PRESENTATIONUnder the law, ERA is mandated to set power tariffs although the authority conducts public hearings to make the process more transparent.
The Electricity Act, 1999 as amended by Act No. 4 of 2022, ERA is mandated to supervise the electricity subsector in Uganda. The Act also charges ERA with the responsibility of establishing a tariff structure and tariff adjustments.
ERA sets an Annual Base Tariff which is adjusted on a quarterly basis to provide for changes in macroeconomic factors such as inflation, the exchange rate of the UGX against the US Dollar, and Global fuel prices.
