According to the Daily Monitor, after a month of deliberation, the electricity regulator has loosened the grip on Umeme, allowing it more money to utilise on its operations. This in effect gives Umeme the leeway to increase electricity tariffs in the country.
“They now provided sufficient information that justifies the costs. The regulator works with the information it has. Initially, they had hoarded information. ERA kept asking for information and they turn in this and the other until they eventually stepped up,” Mr Julius Wandera, the ERA principle communications manager.
ERA has approved $52m (Shs192b) up from $41.8m (Shs154b) to be used by Umeme in 2019 on its distribution, operation and maintenance costs. Umeme has also been allowed to utilise $54.7m (Shs202b) for 2020 and $57.4m (Shs212.7b) and $60.5m (Shs224b) in 2021 and 2022, respectively.
For 2023, 2024 and 2025, Umeme will recover $63m (Shs233b), $66m (Shs244b) and $70.4m (Shs260b) spent on distribution, operation and maintenance through the end-user tariff.
Worth noting is that the approved monies are an increment from the previous figures where the regulator had allowed Umeme $40.8m (Shs152b) for distribution, operation and maintenance in 2020, $41.9m (Shs156b) in 2021, $43.7m (Shs163b), 2022, $47.9m (Shs178b) for 2023, $47.9m (Shs178b) in 2024 and $49.7m (Shs185b) in 2025.
However, Mr Selestino Babungi, the Umeme managing director, applied for a revision on grounds that the company needed additional income since it was to increase the number of customer connections from 80,000 to 300,000 annually as required by government’s free electricity connections policy.
In its defence, Umeme explained that there was also a need for additional staff and equipment such as vehicles to maintain the lines if power reliability was to be achieved.
Despite the increase in distribution, operation and maintenance costs, ERA has also increased the power losses targets. For instance, power loss target has increased from 13.79 per cent that was earlier approved to 15 per cent for 2019. Umeme will also have a target of 14.40 per cent for 2020 from 13.01 per cent before, and 14 per cent and 13.47 per cent for 2021 and 2022, respectively.