Inside Gov’t Drive to Deliver Affordable Electricity

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On December 31st, 2022, the Electricity Regulatory Authority (ERA) Chairperson, Dr. Sarah Kanaabi Wasagali, while addressing journalists in Kampala, announced that the government had reduced electricity tariffs.

The new tariffs are for the first quarter of 2023, beginning in January and ending in March. According to Dr. Wasagali, there will be a 1.2% reduction on power tariffs, and domestic users shall pay 250 shillings for the first 15 units purchased in a month, known as a “lifeline.”

She noted that the tariffs have been set based on different factors, such as the appreciation of the Uganda shillings against the dollar, which was 3810.74 at the time the tariffs for the current fourth quarter of 2022 were determined at 3738.33 by November 30, 2022. She also says that they expect electricity demand to grow at an annual rate of approximately 8.3 percent in 2023.

“For commercial users, there will be a 2.1% reduction, whereas medium industrial consumers will have a 2.1% reduction, 0.6% reduction for large industrial users, and the same percentage (0.6%) for extra-large industrial users to make it 1.2% on average,” Dr. WasagaliΒ said.

Under the new tariffs, the government shall maintain the domestic cooking tariff, which is based on domestic electricity consumption between 81 and 150 units per month.

Accordingly, under the cooking tariff, domestic consumers who use between 81 and 150 consecutively for three months are charged under the lifeline tariff instead of the above lifeline.

She says the move is further intended to motivate people to use electricity for cooking instead of other forms of energy such as charcoal or firewood.

Nankabirwa Ruth, the Minister for Energy and Mineral Development, said that the government is making efforts to have a progressive, gradual end-user tariff reduction.

The minister noted that the move aims at promoting industrialization for socio-economic transformation and improved welfare in society.

In a bid to increase the usage of electricity in the country, the government shall also implement the hybrid customer connection framework, where the cost of a pole connection has been reduced from 720,883 shillings to 470,000 shillings.

According to the 2018 International Hydropower Association report, Uganda has an installed capacity of 743 MW. Uganda expects to commission the 600 MW Karuma Hydro-power Plant next year and, with this, connect the West Nile region to the transmission grid in March 2023.

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