Slight drop in Q2 2019 electricity prices

Domestic consumers will pay about Shs9 less for each each unit of electricity supplied by Umeme Limited in the second quarter of 2019 compared to the first three months of the year.

Electricity end-user retail tariffs for April to June declined by an average of 1.3% relative to the tariffs of the first quarter, the Electricity Regulatory Authority said on Thursday.

The reduction was driven by a stronger shilling and the decline in international fuel prices.

Domestic consumers, who include residential houses, small shops, and kiosks will pay a flat rate of Shs760.2 for each unit of electricity, down from Shs769 for the first quarter. The lifeline rate, which applies only to this category, is Shs250 for the first 15 units purchased every month.

Electricity tariffs (retail) per unit for Q2 2019
Consumer category Q2 (April to June) Q1 (January to March)
Domestic Shs760.2 Shs769.0
Commercial Shs675.4 (Shs416.2 at off-peak) Shs684.8
Medium industrial Shs604.7 (Shs371.7 at off-peak) Shs613.2
Large industrial Shs371.2 (Shs241.7 at off-peak) Shs377.7
Extra-large industrial Shs307.9 (Shs205.5 at off-peak) Shs311.9
Street lighting Shs742.8 Shs751.1

Commercial consumer tariffs fell 1.4% to an average of Shs675.4 per unit. The category includes small scale industries, fuel and water pumps, restaurants, salons, etc. At peak time, the tariff for commercial consumers is Shs875.6 and Shs416.2 at off-peak. The shoulder rate is Shs674.

The tariff for medium industrial consumers declined to Shs604.7 from Shs613.2. At off-peak, it Shs371.7, Shs783 at peak time and Shs602.7 between peak and off-peak periods.

Large industrial consumer average tariffs fell 1.7% to Shs371.2, Shs241.7 at off-peak, and Shs487.2 at peak time. The shoulder rate for the category is Shs375.1.

Meanwhile, average tariffs for extra-large industrial consumers declined by 1.3% to Shs307.9. The peak time tariff declined to Shs414.3 while the off-speak tariff came in at Shs205.5; the shoulder tariff is Shs318.9.

Power prices for street lighting in quarter two reduced to Shs742.8 from Shs751.1.

The Electricity Regulatory Authority reviews and adjusts electricity tariffs at the beginning of each quarter, taking into account changes in inflation, the exchange rate of the Uganda shilling against the US dollar, and international fuel prices.

The decision to lower them followed the shilling’s appreciation against the dollar — it rose 1% — between 30 November 2018 and the end of this February. In addition, international fuel prices declined by 2.3% in the same period.

Umeme Limited also indicated to the regulatory authority that current monthly service fees do not reflect changes in macroeconomic conditions because they were last adjusted in 2012.

But ERA said it did not adjust the fees because the utility did not submit underlying assumptions and justifications for the claim. The authority added that it is undertaking a “cost of service study” that will determine the monthly service charges per consumer category and adjust them accordingly.

The tariffs are for power supplied by Umeme Limited, Uganda’s largest power distributor. The Uganda Electricity Transmission Company Limited, which buys power from generators and then sells to distributors, is expected to sell 94.3% percent of the energy it will purchase to Umeme Limited in the second half of 2019.

Related: Umeme 2018 revenues flat but books Shs132bn profit as it returns to ‘normal’ curve