Is UMEME ripping off Ugandans with new high power tarrifs?

By Faridah Namakula

The cliché, ‘dropping from the frying pan in to the charcoal stove has recently gained significance in Uganda with the new increase in power tariffs. While Ugandans lamented the high prices for commodities, fuel and utilities, another bomb dropped when the Electricity Regulatory Authority (ERA) announced increment in power tariffs with effect from 15^th January, 2012. Tariffs for domestic consumption are to be increased by 36% and for industrial use by about 26%.  This is in addition to the periodic 24 hour load shedding. The increment was precipitated by government’s announcement to remove power subsidies on power. Government argues that it intends to use the money for the subsidies to invest in other dams so that there is enough power generated for domestic and industrial use.

Besides the impact of increased charges that are about to be felt, the power outages have already caused loss of millions of shillings to both small and big enterprises, from saloon operators, maize mills to production and manufacturing industries. It is common these days to find Kampala streets in a blackout at night. The situation is not any better during the day since city traders in the arcades spend several days a week without power. If the power is available then it lasts only a few hours.

The recent policy by power suppliers to resume the 24 hours load shedding is virtually affecting all sectors of the economy. It has exacerbated the current economic meltdown that arose out of the global economic crisis, which has hit world economies to the extent of bringing down some governments in Italy and Greece.

Whereas the country has been suffering from deficient power supply for some time, the current crisis has reached unbearable levels. People took to the streets to protest the precarious situation in which they find themselves. However things have not changed. The response from the authorities has been quite unconvincing; ranging from increased consumption, breakdown in machinery to failure by government to pay private companies generating power.

Officials from the energy ministry and private power suppliers attribute the shortage to low power generation and supply, and the increased costs of thermal generation. It is also true that the number of people seeking to be enlisted on the grid is on the rise as the population increases. Power supply has however been constrained, with the country relying on only one dam, Nalubaale, for power generation. This dam, which was constructed and opened in 1954, can no longer meet the power demands of the country. In 2000, another dam was constructed along the Owen falls dam to boost production. This did not however address the acute power shortages.

Government has promised to address the crisis by constructing other dams in Bujagali and Karuma. Whereas Bujagali is expected to be opened in 6 months time, construction of Karuma is yet to begin. There is little hope though that the crisis will be adequately addressed because of the megawatts expected to come from Bujagali. This means the solution will be temporary. A permanent solution could lie in constructing small and multiple dams in various areas to meet situational and geographical power needs.

Meanwhile, Kudos to parliament for suspending the increment of the electricity tariffs. Parliament has halted the electricity authority’s plans to increase electricity charges until all legal processes have been followed, and all stakeholders consulted. This has set ERA and parliament on a collision course with each party maintaining their stance on the matter. Parliament contends that ERA did not go through the necessary procedures established by the law to effect the changes, and so they should be suspended. ERA contends that parliament has no authority to block the increments. This impasse is likely to create more confusion around the issue of tariffs.

The current crisis should enjoin government to seriously consider exploring other sources of energy like wind and solar. Hydro power has proved costly to produce, and may not be a panacea to the country’s power problems. Hydro power is largely vulnerable to the vagaries of nature and when the country is bedeviled by acute dry spells, water levels are adversely affected. This in turn affects power generation hence the incessant power crisis. Construction of hydropower dams has also attracted criticism from environmental activists who regard such huge dams as a big danger to environmental conservation and preservation.

Taxes on such aspects like solar panels and generators should be examined by government to encourage their importation and use so as to minimize pressure on hydro power. Government should also marshal efforts to fast track the exploration of oil in the Albertine region so as to create opportunities for the emergence of thermal generation and increase availability of power in the country.

Government should also create incentives to attract investment in the energy sector. In this regard a good tax regime and conducive political and economic environment are essential to realizing this goal. There is need to also consider the emerging debate in the country for the government to take over management of the power sector from the private investors up to such a time when the situation has stabilized.

The writer is a second year Masters student of journalism and communication at Makerere University, Kampala, Uganda.