Business

Umeme Tables Shs813Bn Budget for 2021 Amid Protests over High Connection Fees

Uganda’s main power distribution utility Umeme has tabled a $219 million (Shs813.2 billion budget) for 2021.

Of that, $119 million (Shs442.4 billion) will be for capital investments in the grid while $60m (Shs222.4bn) will cater for net operating costs.

The company says it will spend $2m (Shs6.6bn) on lease payments and the balance ($38m/Shs141.8bn) on an assortment of other items.

The development comes at a time of increased public outcry as a result of incessant power outages hitting different parts of the country including Kampala.

This situation usually worsens during the rainy season.

Umeme said it would invest in the evacuation of Karuma and Acwa hydropower plants, on improving power supply and expand the network.

Additionally, the distributor will clear the backlog of 240,000 applications for connection, retrofit the 40,000 post-paid meters still in use.

Selestino Babungi, the Umeme managing director, said  COVID19 has impacted the way the company does its business.

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“2020 was a difficult year for us as a company. We had ambitions plans but COVID19 impacted us. However, we demonstrated resilience and as a company we say that electricity is a fundamental input into the economic transformation of this country so we came out strongly to  continue putting in place systems so we continuity of supply and services to our customers,” he said.

Babungi said what the company proposed was anchored in the need to continue investing the distribution network to improve reliability, the quality of supply, evacuation of the Karuma upcoming power, boost the demand and uptake of increased generation and continue to support the government access agenda.

Umeme said it would continue providing them with Personal Protective Equipment, establish even more safety clubs in schools and clearing vegetation near power installations to ensure uninterrupted supply.

While presenting the company’s revenue requirement on Friday during a virtual application for tariff review, Blessing Nshaho, Umeme’s Chief Corporate and Regulatory Officer, said prospective electricity customers will soon be applying for connections online.

“This would be for the convenience of customers. It would also in line with standard operating procedures on minimising human contact where possible. Presently, one should travel to the company’s office that serves his or her area to pick and fill application forms,” said Nshaho.

He said they have been testing the application system over the last couple of months.

Babungi said the company has over the years invested in technology and has the capacity to connect many customers to the grid.

Connections

The company currently has 1.53 million customers, up from 292, 000 in 2005 when it Umeme started operating in Uganda.

Umeme said customers paying for no pole connections should expect to be connect within 10 days of receipt of their applications.

Those who will require poles will be connected within thirty days.

On December 7, the government allowed individuals who can meet the full cost of connections to pay for them.

The government said it had run short of funds to subsidise the connection costs for prospective customers.

It said individuals who cannot pay the full connection charges should wait until the government finds the resources to subsidise the costs.

Power distribution utilities will now charge Shs741,188 for a no pole connection while a one pole service is between Shs2.3million and Shs2.7m depending on whether the cable used will be bare or not.

A group of activists recently threatened to sue Umeme, saying the new exorbitant connection fees violate government’s obligations under Section 62 of the 1999 Electricity Act to promote, support and provide rural electrification programmes to achieve equitable regional distribution access to electricity; maximise the economic, social and environmental benefits of rural electrification and promote expansion of the grid and development of off-grid electrification.

The activists say the new directive fail “to ensure transparency in relation to the activities of the power sector and the authority; fair balance of the interests of the consumers, government and participants in the power sector and promote continuity in the supply of electricity.”

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