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UGANDA’S POWER TARIFFS HIGHEST IN EAST AFRICA Uganda’s power tariffs are the highest in East Africa. This follows continuous power tariff increments, 37% and 43% which raised the cost of production thereby hurting the steady economic growth. East Africa includes Kenya, Tanzania and Rwanda. Uganda’s domestic power consumers pay sh62 per unit for the first 15 units after which sh426.1 is paid for the subsequent units. In addition, a monthly service charge of shs 2,000 is paid. However, the power rates don’t reflect the actual cost of a unit because the Government pays about shs 173.9 per unit for every consumer. To subsidize the domestic power rates, shs229b was injected and larger industries saw their tariffs increase by 55% from the previous 37%.The Kenyan domestic power consumer pays shs.38.75 per unit for the first 50 units. The subsequent units are categorized into three. The first category is for consumers who use between 51 and 300 units. They pay shs 166.25 per unit. The second category is for those using between 301-3000 units. They pay shs 175 per unit. The third category is for consumers who use between3001-7000 units. They pay 345 per unit. All the categories are subjected to a monthly service charge of 1875. The Tanzanian domestic power consumer pays shs 52 per unit, while in Rwanda, domestic electricity consumers are charged shs 389 per unit. Uganda’s high tariff structure is attributed to the continued reliance on expensive thermal power due to reduction in hydro power production and inadequate investments in other energy sources. The Government procured 100MW thermal power generators and plans to purchase another 100MW.The Electricity Regulatory Authority’s chief executive officer, Frank Sebbowa,said thermal power generation would cost domestic consumers an extra $88m (shs 154.8) every year on top of the government’s subsidy. Sebbowa said without the subsidies, domestic consumers would be paying sh600 per unit because generating 100MW of thermal power requires between 600 and 800 litres of diesel a day. In abid to reduce power consumption,800,000 energy-saving bulbs were imported at a cost of 1.2m (shs 2.1b) and are being distributed freely. If all domestic consumers replace all their ordinary bulbs with the energy savers, between 30MW and 45MW of electricity will be saved for industries and hospitals. Kenya, Tanzania and Rwanda’s power sources are a combination of hydro, geothermal, gas, methane, solar, wind, and thermal, a practice that mitigates power price increases. Kenya’s installed hydropower capacity is 677.3MW.More electricity is generated from thermal, geothermal, wind and gas due to robust investment in the energy sector. Tanzania’s major energy source is hydro-power but diversification to other sources makes power relatively cheap. The country is connected to the regional Southern African power tool, which facilitates cheap and accessible power. Rwanda generates 20MW of thermal power and spends about $65,000 (shs114.4m) a month.5MW is generated from methane gas pilot plant at Gisenyi, while 9.5MW is generated from Nyabongo.There are also plans to import about 400,000 energy saving bulbs to reduce energy consumption. However, all the four countries suffer from distribution inefficiencies manifested through huge power losses, inaccurate billing system, and poor record-keeping and illegal connections. Inflation, drought, high fuel prices and the ever-rising demand for electricity due to increased economic activities have led to increase in the power price and led to a shortage. However, Uganda’s goods have become uncompetitive regionally due to high cost of production coupled with inflation and high fuel prices. |
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