No more Shs16b ‘free’ cash from govt to Umeme
. Power distributor, Umeme Ltd, will no longer receive the Shs16 billion it has been getting from government annually for excess sale of electricity.This follows a decision by the Electricity Disputes Tribunal to dismiss an appeal by Umeme against the Electricity Regulatory Authority , seeking amendments to its Power Supply Licence.The tribunal dismissed the appeal on a technicality because Umeme Ltd did not show up for the proceedings it had filed in March 2012.
Under the previous arrangement, the deal was that while setting the electricity tariff, the regulator would make a projection of how much energy Umeme would sell. If at the end of the year, Umeme sold more electricity that had been projected, it would be paid the extra money.Mr John Julius Wandera, ERA’s principal communications officer, said the ruling should help to ensure that Umeme “strives to be more efficient.”However, Umeme appealed against this decision and asked the tribune to reverse ERA’s amendments, claiming the regulator had not exhaustively engaged the firm.According to Umeme, revenues from excess energy sales, sometimes referred to as the growth factor, are crucial in raising finance for capital investment.