Power utility firm Umeme wants its lifeline tariff increased from the current Shs 150 to Shs 200.
The lifeline tariff is an affirmative tariff aimed at enabling those at the base of the consumption pyramid to have basic power uses like lighting a few bulbs and ironing a few clothes.
The Electricity Regulatory Authority (ERA) allows Umeme to provide 15 units per month for all domestic consumers charged at Shs 150 per unit.
According to Umeme’s David Birungi, the assumption is that poor households would use about 15 units and therefore won’t get burdened with paying for extra units at Shs 685 per unit.
It is this affirmative tariff of Shs 150 shillings that Umeme wants increased to Shs 200. Umeme has written to ERA requesting that the lifeline tariff be increased.
Whether or not the tariff will be increased is dependent on a process, including public hearings. Speaking in an interview with URN, Umeme managing director, Selestino Babungi, declined to provide reasons for the request to increase the lifeline tariff.
It is ironical to see Umeme keen on raising such an affirmative tariff yet it claims to be making good revenues, in the region of Shs 1.2 trillion, according to Babungi.
If the lifeline tariff increases, it will increase the current Shs 685 per unit tariff for domestic consumers. In addition to the tariff, consumers also pay value added tax of 18 percent and a monthly service fee of Shs 3,630, equivalent to about a dollar.
Uganda’s power tariffs are the highest in the region, although it is the most endowed with power generation potential and energy sources. The national electrification rate is estimated at 14 per cent and less than 7 per cent in rural areas.