Uganda National Renewable Energy & Energy Efficiency Alliance

MEMD: Reviewed Electricity Tariff Structure

On the 16th of December 2021, the Minister of Energy and Mineral Development, Hon. Dr. Ruth Nankabirwa Ssentamu, launched the Reviewed Electricity Tariff Structure applicable to the customers served by Umeme Limited, effective January 2022.

The remarkable amendments to the Tariff structure include the introduction of the Cooking Tariff, review of the criteria for the Beneficiaries of the Lifeline (Social) Tariff and the Introduction of a Pilot Tariff Category to supply power to two clustered industrial parks located in Buikwe and Kapeeka to promote Productive Use of Electricity.

While launching the reviewed structure at the Uganda Media Center, the Minister noted that the reviewed structure was in line with the NRM government’s Vision 2040, the National Development Plan III, and the NRM Party Manifesto. She added that the changes in the Structure were also in line with the Sustainable Development Goal Number 7 that calls for “affordable, reliable, sustainable and modern energy for all by 2030” aimed at promoting accelerated access to clean energy for improved welfare of society for Social-Economic Transformation.

With respect to the Cooking Tariff, the Minister noted that it was a deliberate strategy by the Government of Uganda to displace charcoal and other biomass sources of cooking fuel by making the cost of electric cooking lower than the cost of cooking using charcoal in homes and that it was associated with health benefits for communities, cost savings, and the convenience of clean cooking.

While addressing the Media at the launch, the ERA Board Chairperson, Dr. Sarah Wasagali Kanaabi, noted that the reviewed Tariff Structure was aimed at catering for the current and future needs of the Electricity Supply Industry in an effort to reduce the cost of Electricity.

The Chief Executive Officer of ERA, Eng. Ziria Tibalwa Waako, in her remarks, noted that the Authority would do everything possible to ensure reliable Electricity supply to support Ugandans to enjoy cooking using Electricity under the new Cooking Tariff; and also to support Industrialists to produce more commodities for sale on both the Ugandan and Regional markets at competitive prices.

ABOUT THE REVIEWED ELECTRICITY TARIFF STRUCTURE

a) DECLINING BLOCK TARIFF FOR DOMESTIC CONSUMERS (COOKING TARIFF)

The Cooking Tariff is a strategy by the Government of Uganda to displace charcoal and other biomass sources of cooking fuel by making the cost of electric cooking lower than cooking using charcoal in homes. It is being introduced under a Declining Block Tariff Structure, which allows for differentiated Tariff levels based on the amount of energy consumed, whereby the units of Electricity consumed by a Domestic Customer beyond a set monthly threshold announced by the Authority are charged at a Lower Tariff. With the Cooking Tariff, consumers will pay UGX. 412 for each Unit of Electricity in the threshold approved by ERA (81st to 150th Units).

b) REVIEW OF CRITERIA FOR THE LIFELINE TARIFF BENEFICIARIES

A Lifeline Tariff is a price for a minimal package of Units of Electricity, helping low-income earners access affordable Electricity. It aims to facilitate the Electricity consumers in the low socio-economic customer class category to afford the Electricity units deemed necessary for basic domestic use.

Under the review of the qualification criteria, customers who consume less than 100 Units of Electricity in a month qualify for the Lifeline Tariff of UGX 250 for each of the First 15 Units consumed in a month. Customers who consume more than 100 Units of Electricity in a month do not qualify for the Lifeline Tariff but rather pay UGX 747.5 for each of the First 80 Units of Electricity; and thereafter enter into the Cooking Tariff (Declining block) of UGX 412 per Unit upto the 150th unit of Electricity consumed.

c) THE PILOT TARIFF FOR INDUSTRIAL PARKS

In a bid to improve the competitiveness of Uganda’s Manufacturing Sector, the Government will, effective January 2022 Pilot the Supply of Electricity to Industrial Parks at Five (5.0) United States Cents per kilo Watt-hour.

The piloting project will commence at Two (2) Industrial Parks, namely: Lao Shen in Kapeka and MMP Industrial Park in Buikwe District. During the piloting period, Consumption of Electricity in the Two (2) Industrial Parks is expected to increase to help offset the revenue shortfall that would result from supplying Electricity at Five (5.0) United States Cents per kilo Watt-hour.

View Full Statement HERE.

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