ERA Reduces Electricity Tariffs for the Third Quarter of 2021
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The Electricity Regulatory Authority (ERA) has approved new Electricity End-User Tariffs to be charged by Umeme Limited for the supply of Electrical Energy in the Billing Period from July to September 2021.
The New Electricity End-User Tariffs indicate a remarkable reduction across Consumer Categories, with the exception of Street Lighting.
According to the New Tariffs, Domestic Consumers will pay UGX 250 for the First 15 Units under the Lifeline Tariff and thereafter pay UGX 747.5 for the next Units purchased, a reduction from UGX 750.9 in the previous quarters.
Commercial Consumers will pay UGX 616.6 from UGX 639.8, Medium Industrial Consumers - UGX 526.9 from UGX 556.0, Large Industrial Consumers - UGX 355.0 from UGX 361.0, Extra Large Consumers - UGX 300.2 from UGX 301.7, while the Tariff for Street Lighting has been maintained at UGX 370.0.
The approved Electricity End-User Tariffs represent a Weighted Average Reduction of 2 per cent, relative to the Tariffs of the Second Quarter of 2021.
According to the Chief Executive Officer of the Electricity Regulatory Authority, Eng. Ziria Tibalwa Waako, “the Commercial Consumers and Medium Industrial Consumers are the biggest direct beneficiaries of the reduction in Tariffs applicable for the period July to September 2021, with a reduction as much as UGX 23.2 per Unit and UGX 29.1 per Unit of Electricity consumed for the Two (2) Consumer Categories, respectively.” Eng. Waako explains further that “the reduction in the Tariffs of these Two Categories is a deliberate effort by the Electricity Regulatory Authority to support the Small and Medium-sized businesses to recover from the adverse effects of the COVID-19 Pandemic, thereby contributing to the recovery of the economy”.
The new End-User Tariffs are attributed to the following factors:
- Appreciation of the Uganda Shilling against the United States Dollar
In the Second Quarter of 2021, the Exchange Rate of the Uganda Shilling against the United States Dollar appreciated by 3.3%, from Ush 3,665.78/US$ as at 26th February 2021 to Ush 3,546.0 as at 31st May 2021. The Exchange Rate of the Uganda Shilling against the United States Dollar also appreciated by 4.1% from the Exchange Rate of Ush 3,699.17/US$ in November 2020, which was used to determine the Base Tariffs for the year 2021.
- Increment in the International Fuel Prices
The International Fuel Price for crude oil for May 2021 was US$ 66.91 per Barrel, compared to US$ 40.08 per Barrel used in the determination of the Base Tariffs for 2021. This represents an increase in the International Fuel Prices by 66.9% from the Base Period.
- The Total Quarterly Energy expected to be purchased by UETCL, which is 1,220.32 GWh.
- The Water Release at the Nalubaale-Kiira Generation Complex, which is projected at 1,000 Cubic meters per second (cumecs) for the Third Quarter of 2021, which translates into an Average Generation Capacity of 172.7 MW from Nalubaale-Kiira and 178.8 MW from Bujagali Energy Limited.
The New Tariffs apply to all Electricity Consumer Bills raised by Umeme Limited, based on Meter Readings and Yaka purchases taken in the period July to September 2021.
In line with the Quarterly Tariff Adjustment Methodology that was approved by ERA in 2014, the Authority sets out an Annual Base Tariff at the beginning of each calendar year. The Base Tariff is adjusted by ERA on a Quarterly basis to provide for changes in the Macro-Economic factors, namely: the Consumer Price Index, the Exchange rate of the Uganda Shilling against the United States Dollar, International Fuel Prices, and the Energy Generation Mix (from the assumptions used in the determination of the 2021 Base Tariffs).