Electricity Regulatory Authority Introduces UEDCL to Succeed UMEME for Power Duties

Oct 22, 2024 - 21:41
Oct 23, 2024 - 12:09
 0
Electricity Regulatory Authority Introduces UEDCL to Succeed UMEME for Power Duties

The Electricity Regulatory Authority (ERA) has introduced a power company during a public hearing that is aspiring to succeed UMEME duties in areas of Supply, Sale and Tariff Parameters towards the expiration of its contract from the government by next year.

The Authority (ERA) is mandated under the Electricity Act, Chapter 157, Laws of Uganda, to hold a Public Hearing in respect of any application in order to promote transparency, fairness, objectivity and participatory approach in decision making on matters of importance and interest to stakeholders in the electricity sector as well as the public.

On Tuesday in Kampala, the Executive Director ERA, Eng. Ziliwa Tibalwa Waako introduced the Uganda Electricity Distribution Company Limited (UEDCL) and their applications for distribution and sale licenses, as well as tariff performance parameters. she commended the company's 19-year journey and thanked them for their contributions to the electricity sector.

Emphasizing the importance of public support for the Electricity Regulatory Authority (ERA) to execute its mandates effectively, Tibalwa said that the public hearing is held in accordance with regulations 16 and 17 of the Electricity Application for Permit Licenses and Tariff Review Regulation 2007, public hearing and Regulatory Authority's Mandate.

Therefore, the purpose of the public hearing, is to review applications for licenses and tariff adjustments.The hearing is significant as it is the first during the implementation of the second generation reform in the electricity supply industry, the reform includes the renewal of all electricity concessions held by private players, with Umeme's concession expiring on March 31, 2025.

Tibalwa, however, noted that the authority has initiated and implemented new initiatives, such as the clean cooking charcoal power initiative and the declining block tariff for industrial consumers, financial sustainability and Tariff Reduction Framework. “The authority's approval of a framework for tariff reduction during periods of low demand growth to ensure financial sustainability, the authority has made significant progress in implementing and operationalizing the amended Electricity Act, Chapter 157.”

The authority has also received and considered applications from interested investors for the transmission segment, including Marine Power and Grid Works, developing regulations for direct purchase of electricity by specifying categories of consumers and has approved two applications for direct purchase and sale of electricity.

About significant milestones, she acknowledged the commission of the Karuma hydro power plant and the connection of the West Nile region to the national electricity grid. The concession agreement between Umeme and the government will end on March 31, 2025, and the authority has undertaken several activities for an effective transition, she added.

“The authority has reviewed and assessed Umeme's readiness to take over the distribution network and has implemented the necessary action plans. The buyout amount for Umeme's assets will be determined by the Office of the Auditor General, ensuring a fair and collaborative process.”

On issue regarding consultations and quality of Service Standards, Tibalwa mentioned that the authority has held various consultations with stakeholders to establish the economic regulation framework and determine tariff performance parameters, were it has approved funding for distribution companies to upgrade their prepaid metering systems to new technology. The assessment of compliance with quality of service standards has revealed areas in need of improvement, which are being monitored to ensure timely implementation.

Furthermore , the authority has signed a country hosting agreement to host the Secretariat of the Independent Regulatory Board of the East African Power Pool in Kampala.

While condemning the Vandalism, she called upon public vigilance, emphasizing the importance of public vigilance in reporting vandalism of electricity infrastructure to reduce operational and maintenance costs. The authority acknowledges the support of the Uganda Police, Uganda People's Defense Force, and the public in the fight against vandalism. “ Therefore ERA continues to focus on implementing the second generation energy reform, capacity building, and adopting advanced technologies for the electricity supply industry. We will promote more investments aimed at growing demand and improving reliability and efficiency through reduction of technical and commercial losses.” 

Mr. Paul Mwesigwa, the Executive Director UEDCL discussed the background of the company and structure by introducing the purpose of the meeting, which includes discussing the asset infrastructure plan, tariff application, performance parameters, financial requirements, and requests to the authority or regulator.

UEDCL is a 100% government owned company in Uganda, with two shareholders, the Ministry of Energy and Mineral Development and the Ministry of Finance, Planning, and Economic Development.

Mwesigwa said that UEDCL was established in 2001 as a government successor company to manage and operate the electric distribution business at 33 KV and 110 KV. The company operates in 102 districts with 65 offices across the country, including two in Kampala, and employs a total of 515 employees as of September 2024.

About the historical context and expansion, he added that In 2005, the government invited private capital to attract investment into the country, leading to the concession of the urban network to private operators for 20 years. The concession agreement is set to expire on March 31, 2025, and UEDCL is applying for a license to take over the activity in these areas, Mwesigwa described.

Since 2014, UEDCL has expanded its customer base from 56,400 people to 213,336 people as of September 2024, particularly in areas considered commercially unviable by private operators and UEDCL's efficiency has allowed them to succeed where private operators have failed, thanks to their ability to operate in remote areas.

He explained the mandates and responsibilities that their company is the asset owner of all distribution networks below 33 KV across the country, including those operated by private companies like UMEME and LENGO. In addition, the company holds a license for distribution in areas outside the concession areas and monitors the use of assets by concessionaires to ensure they are used for their intended purpose.

“UEDCL is responsible for maintaining the continuity of power supply in the country, prepared to take over any private electric distributor in case of policy changes or failure to meet requirements. The company also has a license to distribute and sell electricity in Uganda, with plans to include new service territories in the new license. The vision is to be a reliable, customer focused, and safety oriented national electricity distributor.”

The company emphasizes teamwork and self-reliance, with a belief in being their own consultants and achieving goals without external help, another strategic focus includes delivering excellent customer service, operational efficiency, and enhancing business growth and sustainability.

Mwesigwa however, included that the company operates a well-managed network that allows for effective control and communication, contributing to their success and expansion plans. On the Business Philosophy and ESG, UEDCL's business philosophy is centered on connecting customers quickly and reliably, ensuring electricity availability and reliability. The company places a strong emphasis on environmental, social, and governance (ESG) practices, which are critical to their day-to-day operations.

We use an approach to ESG that includes focusing on customer connection, reliability, and availability, which are key drivers of their business strategy and aims to balance growth and sustainability while maintaining high standards in ESG performance.

Benjamin Mwibo Benjamin Mwibo is a talented, passionate and creative journalist with a commitment to high quality out put that is factual and researched. Above all Dedicated with a strong desire to identify the truth of the matter.