The Independent (Kampala)

Uganda: ERA Calls for Advice On Automatic Tariff Adjustment Regime

The Electricity Regulatory Authority (ERA) has called on the members of the private sector, government and the public who are well versed with finance knowledge to help it scrutinize the budgets submitted by power generators and suppliers (licensees) for the year 2013.

The budgets contain the costs which licensees estimate they will incur in their business for the year 2013. The licensees include; UMEME, Eskom, UETCL, UEGCL and UEDCL.

Speaking at a public hearing in Kampala last week on the power sector review and the move by government to peg power tariffs on the movement of the exchange rate and other factors, the ERA Chief Executive Officer, Benon Mutambi said, they have received complaints from UMA and a few members of the public about the proposed implementation of the automatic power tariff adjustment regime and are discussing the matter with the complainants and other members of the public.

The government wants to peg power tariffs on the movement of the exchange rate, oil prices and inflation so that once there are movements-either upwards or downwards by these factors the power tariffs would automatically follow suit month-on-month.

Most participants at the workshop opposed the idea saying the system will increase the cost of power which will negatively affect the final consumer. The participants argued that manufacturers will be forced at times to raise the price of manufactured goods claiming that the power costs are the main cause.

Recently the Uganda Manufacturers Association issued a statement opposing the move.

"UMA is deeply concerned about the development as it comes against the background of an increase by 70% and 40% respectively for the large and medium sized industries that happened on Jan. 15," the association said.

"UMA as a key power consumer is opposed to the proposed power tariff review and implementation and hereby notifies ERA to stay the proccess," it said, adding this will allow wider consultations on the matter given the centrality of power in driving not only industrial but overall economic growth and development in the country.

Umeme, the main power distributor in the country has put a proposal before the government through ERA seeking to increase domestic bills by Shs69, Shs52.8 for commercial and Shs14.6 for mid-sized firms arguing the cost of doing business has gone up. But traders and other power consumers are opposed to the proposal saying it will make power unaffordable and will increase the cost of doing business.

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