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New Era in Uganda’s Power Sector: ERA Takes Over from Umeme with Lower Rates and Better Service
In a major shift for Uganda’s power sector, the Electricity Regulatory Authority (ERA) announced last month the official handover of power distribution from Umeme to Uganda Electricity Distribution Company Limited (UEDCL) on March 31. This change signals a new era, with the promise of better value for Ugandan consumers, ensuring that the public enjoys the new wave of UEDCL
Dr. Sarah Wasagali Kanaabi, the Chairperson of ERA, confirmed that the takeover would bring significant benefits, including rebranding to Light and more affordable electricity tariffs. The regulatory body emphasized that these new rates are designed to make electricity consumption more accessible for Ugandans, especially those in lower-income households.
The Impact on Consumers: Lower Power Tariffs
One of the biggest changes is in the way power is priced. Under the new UEDCL structure, electricity prices have been adjusted to offer better value. The adjustments were made taking into account inflation, exchange rate fluctuations, and changes in the cost of electricity supply.
For households, the first 15 units of power used in a month will now be charged at a much lower rate—Shs250 per unit. This is a significant reduction compared to the rates under Umeme, which were higher for the same amount of power.
How Much Power Can You Buy for Shs10,000?
- First 15 units (lifeline rate):
- Shs250 per unit
- With Shs1,000, consumers can buy 4 units.
- With Shs10,000, consumers can buy 40 units.
- After the first 15 units in a month:
- Shs756.2 per unit
- With Shs1,000, consumers get 1.3 units.
- With Shs10,000, consumers get approximately 13 units.
This pricing structure benefits smaller consumers the most, with the lifeline rate providing substantial savings. However, as consumption increases, the cost per unit rises, making higher consumption more expensive.
Benefits for Businesses and Factories
The new pricing also extends to large industries, public services, and essential infrastructure. Industries operating during off-peak hours will now pay as low as Shs231.6 per unit, a reduction from previous tariffs. This lower cost for power will be particularly beneficial for manufacturing industries, as it helps reduce production costs, potentially lowering the price of goods and services.
Public hospitals and streetlights will pay Shs360 per unit to ensure that these essential services remain affordable and accessible to all Ugandans.
A Change for the Better
Dr. Kanaabi expressed confidence that the new power pricing would help stimulate economic growth by reducing the cost of doing business. “When factories pay less for power, the cost of production goes down. This means the prices of goods and services might also reduce,” she said, underlining the broader economic benefits of the new pricing structure.
What Does This Mean for Ugandans?
For many Ugandans, the key question is how the changes affect their household budgets. With the new pricing structure, the first 15 units each month are more affordable, and smaller households using less power will benefit the most. However, as consumption increases, the per-unit cost rises significantly after the first 15 units.
ERA is encouraging consumers to monitor their electricity bills and check the updated rates. The new tariff structure will be in place from April to June 2025, and Ugandans can visit ERA’s website or contact them directly for further details.
In summary, the handover of power distribution from Umeme to UEDCL marks the beginning of a new era in Uganda’s electricity sector, with the promise of lower tariffs, more accessible power, and a boost to economic growth, particularly in the industrial sector.
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