Kampala, Uganda --- (METERING.COM) --- January 7, 2008 – The government of Uganda has decided not to increase electric tariffs in 2008 – a decision that will be enabled by offering a subsidy to end users – according to a statement made by Dr. F. B. Sebbowa, CEO of the state-run Electricity Regulatory Authority (ERA).

Utilities in the country had applied for an increase in rates, but the government subsidy, amounting to Ush92 billion ($52.6 million) for 2008 will allow them to remain the same as in 2007, or possibly even allow for a reduction. The Uganda Electricity Distribution Company Ltd. (UEDCL) had asked for a 26.5 percent increase for commercial customers, and a 21 percent increase for domestic customers, but the government was unwilling to authorise the rates increase because the distributor had failed to control power losses. These amounted to some 38 percent of power generated in 2007, largely because of the ageing distribution network and power theft, according to UEDCL.

However, Dr Sebbowa made the point that there were no dramatic reductions in energy losses, even in areas where the distribution networks had been replaced or rehabilitated. He said that other reasons for power losses included non-billing by the utility itself or poor meter reading by its staff.

In an effort to conserve energy the government has distributed 300,000 energy efficient light bulbs, which have also served to reduce users’ electric bills. But more investment in power plants is crucial for Uganda to improve productivity and thus global competitiveness, and the state is investigating the possibility of building additional hydropower plants in order to increase the supply of electricity in the country.