Why Power Tariffs for October to December Remain Unchanged

by Christopher Kiiza
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Power regulator, the Electricity Regulatory Authority (ERA) has announced that the electricity end-user tariffs to be charged by Umeme Limited for supply of electricity for the fourth quarter of 2023 (October to December) will remain the same as for the previous quarter.

According to ERA, domestic consumers will continue to pay 250 shillings per unit for Lifeline Tariff (First 15 Units in a month), 805 shillings per unit for 16 to 80 units, 412 shillings per unit for 81 to150 units while consumers using above 150 units will pay 805 shillings per unit.

Commercial consumers will pay 807.5 shillings per unit of electricity at peak (6 pm to midnight), 615.5 shillings at shoulder (6:00 am to 6:00 pm), and 367.4 shillings per unit during off-peak time (midnight to 6:00 am).

The large industrial users will be charged 519.4 shillings per unit (block 1) and 497 shillings per unit (block 2) at peak, 385.3 shillings (block 1), and 368.6 shillings per unit (block 2) at shoulder, 243.6 shillings per unit (block 1) and 233.1 shillings per unit (block 2) during off-peak time.

Medium industrial consumers will continue to pay 636.4 shillings at peak, 466.3 shillings at shoulder, and 244.9 shillings during off-peak time.

The extra-large industrial consumers will pay 429.5 shillings per unit of electricity (block 1) and 391.6 shillings per unit (block 2) at peak; 326.6 shillings per unit (block 1) and 297.7 shillings per unit (block 2) at shoulder; 233.3 shillings per unit (block 1) and 212.6 shillings per unit of electricity (block 2) during off-peak time.

For street lighting the charge is maintained at Shs 370 shillings.

On average, commercial consumers will pay 611.8 shillings per unit of electricity, medium industrial consumers – 461.8 shillings per unit, large industrial consumers – 384.4 shilling per unit (block 1) and 367.8 shillings per unit (block 2) while extra-large industrial consumers will pay 325 shillings per unit of electricity (block 1) and 296.2 shillings per unit of electricity under block 2.

The approved tariffs have been determined in consideration of the changes in the macro-economic factors that include; international prices of fuel, exchange rate of Uganda shilling against the United States dollar, core Consumer Price Index (inflation), the energy generation mix, and costs approved by ERA.

Why Tariffs Stayed Unchanged

The Director, Corporate and Customer Affairs at ERA, Julius Wandera explained that the reason the tariff has not changed is the slight increase in electricity demand in the previous quarter. This increase occurred even though the rates initially fell below the projected rate for the year.

Wandera said that the Authority anticipates a further rise in power demand during the last quarter, particularly during the festive season, and therefore, it is necessary to keep the tariffs unchanged to sustain this demand.

“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,” he said.

He clarified that the strengthening of the Ugandan Shilling against the United States Dollar, which went from 3,738.33 shillings on November 30, 2022, to 3,719.04 shillings by August 31, 2023, also played a role in affecting the projections for power costs due to its influence on the exchange rate.

 “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.

On matters fuel, under the same month, the prices for crude oil had also reduced by 2.67% selling at USD87.33 per barrel down from USD89.73 which was used to determine the Annual Base Tariffs.

Meanwhile, Uganda’s biggest power station – Karuma Hydro Power Plant’s four units, totaling 400MW are scheduled for testing in this fourth quarter of 2023. These units will be included in the energy generation mix for 2023, leading to a boost in power supply on the national grid.

Karuma’s total electricity generation capacity is 600MW which has turned Uganda into a regional powerhouse.

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