UMEME Ltd, Uganda’s Electricity distribution company, has been in the line of fire of late including the most attacks coming from President Yoweri Museveni himself. But what is the story on the ground as understood by UMEME itself? What about the massive complaints by its customers? Is the company a cheat, a sickman of the power sector or just having unfair treatment?
We interview PETER KAUJJU, UMEME’s Communications Manager:
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#MediaScapeNews: UMEME has been in the line of fire from everyone including the president. What is wrong with you guys?
Kaujju: There is nothing wrong at all. I should say that the current pandemic which is affecting everyone has also had an impact on us but we have had to adjust our operations to ensure that our customers get the service they need. This is what I can closely relate to your question. Umeme Limited is Uganda’s main electricity distribution Company, listed on the Uganda Securities Exchange and cross listed on the Nairobi Securities Exchange. The Company operates a 20-year electricity distribution concession from the Government of Uganda that took effect on 1st March 2005. We are very committed to this and doing our best to make the service affordable for everyone.
#MediaScapeNews: How is Uganda’s electricity sector structured?
Kaujju: After the electricity sector reforms in 1999, Uganda adopted a single buyer electricity sector model, where Uganda Electricity Transmission Company Limited (UETCL) is the System Operator, responsible for the purchase of electricity from all Independent Power Producers, import and export of electricity and being Umeme’s main supplier.
#MediaScapeNews: What is UMEMEs place and role in this?
Kaujju: Umeme holds two licenses; the Distribution and the Supply Licenses. The distribution license allows the Company to invest in the network (build substations, extend electricity lines, install transformers, and maintain the network) while the supply license allows the Company to provide service to end users (connect customers, bill customers, collect revenues, address customer issues. The distribution infrastructure is composed of 161 terminal points with Uganda Electricity Transmission Company at their 20 substations; Umeme’s 69 distribution substations; 15,564 km of Medium Voltage network, 14,014 distribution transformers and 21,788 kms of low voltage network, including 1.5 million metering points. The sector is regulated by the Electricity Regulatory Authority (ERA), whose mandate includes setting operating standards, sector monitoring and setting appropriate end user tariffs. The Company also has a Lease and Assignment Agreement with Uganda Electricity Distribution Company Limited (UEDCL) that spells out how assets are supposed to be maintained.
In addition, Umeme has a Power Sales Agreement with Uganda Electricity Transmission Company Limited (UETCL) that governs the purchase of power from UETCL. This is basically our place in the sector.
#MediaScapeNews: If all this sounds okay, why do we have unending power cuts?
Kaujju: Sometimes the distribution networks get damaged every now and then and, in such incidents, we have to quickly restore supply. The power cuts are not because of inadequate generation but precaution for safety reasons, when rains bring down the power lines, we switch off to save lives as our technical teams fix the issues. We can’t carry out maintenance when the power lines in the affected areas are on. All that said, they have greatly reduced and we give customers ample notification to help them plan ahead.
#MediaScapeNews: What do you say to people who say UMEME are cheats?
Kaujju: We do not charge any fees outside what the energy Regulator has set and approved. Umeme charges end-user tariffs as approved by the Electricity Regulatory Authority. The approved tariffs to be collected meet the cost of the entire electricity supply industry (generation, transmission and distribution). Umeme’s contribution to the cost as at August 2020 is 34% of the average tariff whereas transmission and generation 66%.
#MediaScapeNews: Explain why someone who holds his or her own YAKA meter is harassed by your officials for stealing power. Shouldn’t the YAKA meter be obvious that someone is paying what they are consuming?
Kaujju: I don’t think what you say is called harassment. Some customers bypass the meters but they do not want to be told the truth. Energy losses have a big impact not only to the revenue going to the Government but also a huge risk to the safety of Ugandans. We carry out sensitization as well as enforcement to weed out power theft and also promote safety. Some customers bypass meters while others just hook onto the lines illegally which is a great danger to our communities and in the process of enforcing rules, they will naturally complain.
#MediaScapeNews: What is UMEME doing about the numerous complaints about your poor service?
Kaujju: Our service is not poor at all. We have improved tremendously. We are constantly carrying out customer engagements and we invite customers with any queries / questions to reach out to us on our social media channels or toll free line 0800285285 / 0800385385. Above all, power theft is against the laws of Uganda and can cause death. Let’s desist from the vice.
#MediaScapeNews: What should be the responsibility of citizens in the management of power consumption in Uganda?
Kaujju: Citizens should use power well to advance their wellbeing. There is also great need for Ugandans to protect such public infrastructure. We have encountered cases of vandalism which affects supply and endangers the lives of many.
#MediaScapeNews: People say UMEME is just a middleman with no investment in the power sector. What value have you added to the power sector in Uganda?
Kaujju: Umeme has positively anchored Uganda’s electricity supply industry that is projected for further growth on commissioning of new generation plants. The success of Umeme is traced to implementation of its strategic plans over the period. This has focused on investment in the electricity distribution infrastructure to improve on efficiency, reduce energy losses, expand and reinforce the distribution infrastructure, and increase customer connections. Umeme has grown its operations through the period of its concession. Customer numbers have grown from 292,237 in 2005 to 1,526,000 in June. Losses have been reduced from 38% in 2005 to 17.5% by the end of June 2020 and the collection rate has grown from 80% in 2005 to 99% in June 2020. The Company has invested over USD 739m in the distribution network to ensure safe, efficient and reliable electricity supply. In 2020 alone, Umeme spent USD83.3 million (about UGX310 billion) to ramp up capacity enhancement and network stabilisation in rapidly growing regions across the country. The 2020 plan, which was part of a larger USD450m (UGX1.7 trillion) for the 2019 and 2025 investment agenda, was in support of Uganda’s National Development Plan focusing on increasing grid connections, increasing demand, reliability of supply and driving efficiencies. The 2020 investment focused on 6 critical areas of the business, which when completed, will see us reliably connect over 300,000 additional customers to the grid. The six areas included; addressing energy losses and improve operational efficiency (USD 26.89 million); addressing load demand growth (USD22.72 million); power supply reliability (USD18.89 million); power generation evacuation and supply (USD10.79 million); network systems automation (USD1.93 million) and network protection and security (USD2.06 million). We are key partners in development and certainly not what they have called us!
#MediaScapeNews: Do you pay taxes? How much? How many employees? How many of these are Ugandans?
Kaujju: Umeme is among the top ten taxpayers in Uganda with average tax remittances of Ush 100 billion per annum. Umeme employs over 2000 Ugandans directly and several others indirectly through contractors among others.
#MediaScapeNews: How do you plan to mitigate public hostility towards UMEME?
Kaujju: The power belongs to all of us, the public should avoid illegal power connections and report any incidents that might affect the community such as fallen power lines, among others. Electricity is a big catalyst of development and almost everybody needs it from the smallholder entities to bigger ones such as industries. We are committed to working with our key partners in achieving Government’s Energy dreams as per NDP 3.