Covid-19: ERA cuts electricity tariffs for 2021 third quarter

ERA-CEO-Eng.-Waako: The reduction in the Tariffs of these Two Categories is a deliberate effort by the Electricity Regulatory Authority to support the Small and Medium-sized businesses to recover from the adverse effects of the COVID-19 Pandemic, thereby contributing to the recovery of the economy

Electricity regulatorElectricity Regulatory Authority (ERA) has cut electricity tariffs across Consumer Categories from July to September 2021 with the exception of Street Lighting, the agency has announced.

According to the new End-User Tariffs to be charged by UMEME, Domestic Consumers will pay sh250 for the first 15 Units under the Lifeline Tariff. Thereafter, they will pay sh 747.5 for the next Units purchased, a reduction from sh 750.9 in the previous quarters.

“Commercial Consumers will pay sh616.6 from sh639.8, Medium Industrial Consumers – sh526.9 from sh 556.0, Large Industrial Consumers sh355.0 from sh361.0, Extra Large Consumers sh300.2 from sh301.7, while the Tariff for Street Lighting has been maintained at sh370,” reads part of the statement from the regulator.

The approved Electricity End-User Tariffs represent a Weighted Average Reduction of 2 per cent, relative to the Tariffs of the Second Quarter of 2021.

According to ERA Chief Executive Officer Eng. Ziria Tibalwa Waako, the Commercial Consumers and Medium Industrial Consumers are the biggest direct beneficiaries of the reduction in Tariffs applicable for the period July to September 2021.

“They are the biggest beneficiaries with a reduction as much as sh23.2 per Unit and sh29.1 per Unit of Electricity consumed for the Two (2) Consumer Categories, respectively.”

Reduction aimed at ensuring business recovery from COVID effects

Waako noed that:  “The reduction in the Tariffs of these Two Categories is a deliberate effort by the Electricity Regulatory Authority to support the Small and Medium-sized businesses to recover from the adverse effects of the COVID-19 Pandemic, thereby contributing to the recovery of the economy”.

Factors that led to new End- User Tariffs

The new End-User Tariffs are attributed factors such as appreciation of the Uganda Shilling against the United States Dollar, increment in the international fuel prices among others.

“In the Second Quarter of 2021, the Exchange Rate of the Uganda Shilling against the United States Dollar appreciated by 3.3%, from sh3,665.78/US$ as at 26th February 2021 to sh 3,546.0 as at 31st May 2021.

The Exchange Rate of the Uganda Shilling against the United States Dollar also appreciated by 4.1% from the Exchange Rate of sh3,699.17/US$ in November 2020, which was used to determine the Base Tariffs for the year 2021.

The according to ERA statement, the international Fuel Price for crude oil for May 2021 was US$ 66.91 per Barrel, compared to US$ 40.08 per Barrel used in the determination of the Base Tariffs for 2021. This represents an increase in the International Fuel Prices by 66.9% from the Base Period.

“The Total Quarterly Energy expected to be purchased by UETCL, which is 1,220.32 GWh. The Water Release at the Nalubaale-Kiira Generation Complex, which is projected at 1,000 Cubic meters per second (cumecs) for the Third Quarter of 2021, which translates into an Average Generation Capacity of 172.7 MW from Nalubaale-Kiira and 178.8 MW from Bujagali Energy Limited.”

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