UGANDA: Court delays start of higher power tariffs

By EPHRAIM KASOZI

If you pay the electricity bill in your house or office, court has given you some temporary respite from a new tariff calculation method, which would see you pay more every month based on the prevailing economic indicators.

Implementation of the new power tariff system will have to wait a little longer until court determines a pending dispute that seeks to challenge its application.

Kampala High Court on Friday ordered the Electricity Regulatory Authority (ERA) to stay the implementation of the Automatic Tariff Adjustment (ATA) structure until a ruling on an application for it not to be implemented.

New system

Automatic Tariff Adjustment is a system that factors in the exchange rate of the local shilling against the dollar, the fluctuations in oil prices on the international market as well as local inflation levels, in electricity tariffs.

ERA had set January 1, 2013 to begin implementing ATA to ensure “transparency” since the Uganda Electricity Transmission Company Ltd (UETCL) pays the power producers in dollars – as the power purchase agreements between provide – whereas the power consumers pay bills in shillings.

High Court Registrar John Eudes Keitirima ordered the status quo to continue and set January 8, 2013 for a ruling on whether to temporarily stop the implementation.

The court decision was prompted by an application in which Uganda Manufacturers Association has asked court to stop ERA from implementing the tariff structure based on fluctuations in dollar rates, fuel prices and inflation pending determination of the main case.

The court had earlier set January 25, 2013 for hearing of the case but ERA was slated to begin implementing the tariff system on January 1.

Through their attorneys, Muwema and Mugerwa Advocates, the manufacturers, forming the biggest consumers of electricity in the country, allege that they were not consulted adequately to give an input on the new proposed tariff system.

According to the suit, UMA wants court to force ERA to agree to an earlier request by the manufacturers for a six-month moratorium to allow an assessment of how the new system will affect their power costs.

Mr Fred Muwema told court that the manufacturers are likely to suffer irreparable damage if the new tariff system is implemented without giving them a chance for hearing yet the initiative needs further study and scrutiny.

“UMA is not stopping ERA from determining the tariff charges and methodology, in fact we want them to determine it fairly and reasonably as provided for by the law,” he said.

But Mr Pope Ahimbisibwe, appearing for ERA, asked court to dismiss the application saying the country is likely to face a power crisis if the new tariff system is not implemented soon.

Source: Sunday Monitor (23/12/2012): http://www.monitor.co.ug/News/National/Court-delays-start-of-higher-power-tariffs/-/688334/1649884/-/lwi0k7z/-/index.html