Electricity consumers in Uganda will pay an average 5.2 percent less on electricity over the next three months, following a revised tariff schedule by the Electricity Regulatory Authority (ERA).
The review was made possible by the ease in the parameters that determine the cost of grid electricity, including headline inflation, foreign exchange, the international fuel prices, among others, according to Sarah Wasagali, ERA Board Chairman.
Consequently, while the lifeline consumer tariff remains at 250 shillings for each of the first 15 minutes, the rest of the electricity consumed will cost 775 shillings and 5 cents per unit, down from 796.05 shillings.
Commercial consumers will now pay an average of 575.02 shillings compared to 599.09 shillings.
The review has also lowered tariffs for medium consumers, with the industrial sub-category under this paying 417.08 shillings, while the services sub-category pays 434.05 per unit.
The government through the Ministry of Energy and Mineral Development and ERA has also added to the Public Amenities category to include street lighting and government institutions like prisons, police and army barracks, and referral hospitals, among others.
“This is aimed at making electricity more affordable to critical public resources, and I hope, they will now be able to pay us timely,” said Minister Ruth Nankabirwa.
She also insisted that electricity tariffs will continue to fall when Umeme hands over operations at the end of this quarter, “because the high tariffs have always been blamed on high investment costs by the private sector licensees.”
When UEDCL commences operation of its newly acquired purchase, distribution and sale license in April, the tariff regime will be re-based to reflect the operational parameters of the company which are different from those of Umeme. These include a wider distribution area which will cover the whole country.
The minister said any reduction in tariffs will be gradual for the sustainability of the sector.
“You can’t just reduce tariffs drastically and expect the sector to remain functional, because the tariff is used to maintain production. So there are parameters that must be followed.”
Other factors expected to push down the tariffs include the increase in generation as more new plants are commissioned.
Currently, the country’s installed generation capacity is 2,050 megawatts, about twice the demand.
Wasagali, the ERA Board Chairman pegged the expected further tariff reductions on the determinants of the tariffs that are easing especially inflation and foreign exchange.
Others include the commissioning of Karuma and other plants, the addition of West Nile to the national grid and the generally increasing demand.
Umeme Ltd’s capital investments are also forecast to qualify for an increase in the return on investment of 25 million Dollars to bring the total to 700.736 million in 2025 from 625 million in 2024.
The regulator also expects the corporate income tax waiver for Bujagali Energy Ltd to be renewed in June 2025.
-URN
