KAMPALA – The Energy Generators and Distributors Association of Uganda has rejected a proposal to increase funding to the Electricity Regulatory Authority (ERA) from 0.3% to 0.7% of the electricity sold.
The demand by the association was made while presenting their proposals on the Electricity (Amendment) Bill, 2022 before the Parliamentary Committee on Environment and Natural Resources chaired by Emmanuel Otala.
Otala’s committee is scrutinizing the bill which among others seeks to amend the Electricity Act, Cap. 145 to provide for a staggered term of office for the members of the authority and to provide for additional functions of the authority.
The bill also seeks to prescribe the circumstances under which a holder of a generation license or transmission license may supply electricity to persons other than a bulk supplier, to provide for deterrent penalties for theft of electricity and vandalism of electrical facilities among others.
However, the Association of Energy Distributors and Generators opposed the proposal to increase funding for ERA says, it will increase the cost of electricity.
According to Thozama Gangi, the Chairperson of the Association who also doubles as the Managing Director, ESKOM Uganda Limited, the increase is over 150% which will influence the tariff charges on the end user.
Otala tasked the team to explain how the increase of funding for ERA would increase electricity tariffs.
“How will the increase on levy automatically make the tariff go up because ERA says, for them to operate efficiently, they should be funded well to do their work,” Otala questioned.
Josephine Ossiya, the Chief Financial Officer Bujagali Energy Limited, says all the costs within the sector are passed through to the tariffs which then come back to the consumer. She says that to keep the tariffs down, additional costs need to be reduced.
“Any costs that you load, will inevitably pass it to the tariff and pass it to the consumer; that is just our fear. We are talking about keeping the tariffs down to keep the costs of electricity moderate,” she said.
Selestino Babungi, the Chief Executive Officer, Umeme Ltd said, the increase by over 100% is not rational and will reflect on the end users since it is a pass-through cost.
On the proposal to prohibit the construction, ownership, or operation of a generation station with a capacity of or exceeding 0.5 megawatts without a generation license issued, the team proposes that the minimum wattage should be increased to two megawatts.
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