Opposition demand for reduction in electricity tariffs for domestic consumers

The current Sh882 per kilowatt-hour is so high and has led to the decline in the consumption of electricity.

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electricity tariffs

The Leader of the Opposition, Mathias Mpuuga, has proposed a reduction in electricity tariffs for domestic consumers by at least Sh200 per unit.

Mpuuga on Thursday presented the Opposition’s position on the Electricity (Amendment) Bill, 2022 that is currently being considered by Parliament’s Environment and Natural Resources Committee.

He said that the current Sh882 per kilowatt-hour is so high and has led to the decline in the consumption of electricity.

Mpuuga told MPs that fixing the domestic tariff is the only way to save the country’s forests and the environment and that value addition under the Parish Development Model will depend on how Parliament handles the tariff methodology to provide relief to domestic consumers’ category.

Mpuuga also proposed that to ensure reduced tariffs for end-users, especially domestic consumers, technical losses are removed from the tariff methodology.

“If a distribution company did not make any profit on account of the technical losses on their books of accounts for any particular financial year, the Energy Development Fund shall cover the gap,” he said.

The Nyendo-Mukungwe MP further proposed an amendment that excludes distribution technical losses from the electricity distribution tariff, which he said will lead to an automatic reduction of at least 8.8 percent of the tariff for the domestic and commercial consumers category.

He also proposes the replacement of the Rural Electrification Fund with the Electricity Development Fund, with funding largely derived from excess revenue generated from the sale of electricity by generation, transmission, and distribution companies.

“Creation of the Fund will help to ring-fence financing for energy infrastructures like the transmission and distribution grid, network infrastructure and insurance cover for distribution companies who may in some years fail to absorb distribution technical losses,” Mpuuga said.

According to Mpuuga, the move would boost demand for electricity leading to a further reduction in the distribution tariff and ultimately, raise the profitability of distribution companies as they sell more units of electricity.

Dr. Emmanuel Otaala, the Committee Chairperson agreed with the proposal to lower tariffs saying that all Ugandans have a right to access and use electricity.

“Ugandans should enjoy affordable electricity. Currently, the rates are high. I believe that when the dams which are under construction are commissioned, tariffs will reduce further,” said Otaala.

Alex Ruhunda, the Fort Portal Central Division MP also commended the LOP for linking electricity tariffs with environment conservation, saying that Ugandans are destroying forests to burn charcoal because they cannot afford electricity.

The proposal to amend the Electricity Act, Cap. 145 is intended to remove inconsistencies in the law to introduce flexibility in its implementation and to streamline operations of the electricity sector

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