climate finance

Power distribution company, Umeme Uganda Limited, has proposed an increase of the lifeline tariff from Shs150 ($0.041) per unit to Shs200 ($0.054).

The proposal is one of many that Umeme has proposed in its Annual Tariff Application for 2018, reports the Monitor.

The company argues that this will reduce the gap between what the consumers pay and the cost it incurs to distribute the electricity.

The projected average indicative distribution price for 2018 is Shs288 ($0.062).

The Electricity Regulatory Authority (ERA) manager of consumer affairs, John Julius Wandera, indicated that the public has 15 days to go through the application and can be accessed at ERA’s head office in Kampala.

Alternatively, one can download the soft copies, which have been uploaded on the regulator’s website.

“ERA shall schedule a public hearing at which the masses will be free to comment on all power utilities tariff applications for 2018.

“After the hearing, ERA’s board of directors will meet to decide on which proposals in the applications to approve,” Wandera said.

For Umeme, should the board approve the increment; the electricity distributor will collect Shs2.9 billion ($824,026), up from Shs2.1 billion ($549,409), from the lifeline tariff.

The purpose of the lifeline tariff

The Monitor cited the World Bank’s Role in the Electric Power Sector report; the lifeline tariff is meant to allow low-income earners to consume a minimum block of power at a subsidised rate.

Aside from the lifeline tariff, each domestic consumer pays Shs3, 360 ($0.819) service fees, monthly.

The report adds: “Low prices give rise to excessive demands, by undermining the revenue base, reduce the ability of utilities to provide and maintain supplies… ”

It remains to be seen how, should the lifeline tariff be increased, electricity consumption patterns will change, media underlined.


Featured image: Stock