Do consumers pay high Umeme Limited salaries through the tariff?
- Hits: 1844
No. The Electricity Regulatory Authority approves costs for Umeme applicable over seven years and recovered through the tariff. The approved costs constitute a target and a maximum that is recoverable through the tariff. The actual salaries paid by the distribution company to its staff may depend on company objectives and the company’s internal staff motivation framework. Given that Umeme is a private company and makes earnings from its net investments into the sector, the company may afford to pay its staff salaries in a way that enables the company to achieve the set targets. However, costs above the set approved limits are not recovered through the tariff.