ERA cuts electricity tariffs for first three months of 2020

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The price of electricity for customers supplied by Umeme Limited is set to fall in the first three months of 2020 after the Electricity Regulatory Authority, the regulator, lowered retail tariffs.

ERA sets prices that can be charged for electricity supplied to Umeme Limited’s customers, both on the prepaid or Yaka plan, and post-paid customers. The prices factor in fixed fees, energy charges, and maximum demand charges.

The new tariffs, also the base tariffs for 2020, and will be adjusted quarterly, are on average 1.2% lower than the charges for the last three months of 2019.

The largest average decline was for medium industries, with their tariff falling 3.4% to Shs575.2 per unit or kilowatt hour (kWh), according to a tariff schedule published by ERA. The average tariff for commercial customers reduced by 2.5% to Shs649.4/kWh, while the new tariff for large industries is Shs362.4 per unit or 0.4% lower than what was set for the fourth quarter of 2019.

Electricity tariffs for extra-large industries and streetlights declined by an average of 0.1% to Shs302.2/kWh and Shs370/kWh, respectively. A similar fall was also observed for domestic consumers, who will have to pay Shs751.7 per unit in the first quarter of 2020.

Domestic consumers, however, who include residential houses, small shops, and kiosks, will be charged Shs250 per unit for the first 15 units they consume every month. This so-called lifeline rate is intended to subsidise low-income consumers.

Electricity tariffs (Shs per unit) for Q1 2020
*The declining block tariff is applicable for energy consumed above a certain threshold
Consumer category Time of use Q4 2019 Q1 2020 % change
Domestic First 15 units in a month 250 250 0.0%
Above 15 units 752.5 751.7 -0.1%
Commercial Peak 863.6 849.1 -1.7%
Shoulder 664.7 650.6 -2.1%
Off-peak 408.6 392.2 -4.0%
Average 666.1 649.4 -2.5%
Medium industries Peak 771.4 773 0.2%
Shoulder 593.8 575.6 -3.1%
Off-peak 364.3 319.5 -12.3%
Average 595.6 575.2 -3.4%
Large industries
(*Declining block)
Peak 477.5 483.5
(470.1)
1.3%
Shoulder 367.6 363.7
(353.6)
-1.1%
Off-peak 236.3 245
(238.2)
3.7%
Average 364 362.4 -0.4%
Extra-large industries
(*Declining block)
Peak 406.4 396.1
(289.2)
-2.5%
Shoulder 312.8 302.2
(220.7)
-3.4%
Off-peak 202.3 231.3
(168.9)
14.3%
Average 302.6 302.2 -0.1%
Street lighting   370.4 370 -0.1%

The decline in the new tariffs is a result of the reduction in the international prices of oil in the 12 months to this November, and the appreciation of the Uganda shilling against the US dollar in the year to November 2019.

International fuel prices fell 3.7% while the Uganda shilling appreciated by 0.8% against the US dollar in the review period.

The Electricity Regulatory Authority sets electricity tariffs taking into account changes in the exchange rate, core inflation, the US producer price index, and international fuel prices.

The base tariff also takes into consideration the revenue requirements of licensed electricity supply companies. As a result, it considers changes in factors like energy losses, collection rates, operations and maintenance costs, and investment costs.