Electricity End User Tariffs drop in Quarter 3, 2016 – ERA

SCHEDULE OF ELECTRICITY RETAIL TARIFFS FOR THE THIRD QUARTER 2016

Pursuant to the provisions of Section 10 of the Electricity Act, 1999, (Chapter 145 Laws of Uganda), the Electricity Regulatory Authority has approved the applicable Tariff Adjustment Factors to be applied by Umeme Limited for the supply of electrical energy for the third quarter of 2016 in accordance with the Quarterly Tariff Adjustment Methodology. The Quarterly Tariff Adjustment Methodology provides for adjustment of the annual base tariffs in line with changes in inflation, foreign exchange rate and fuel prices.

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The applicable adjustment factors for the third quarter of 2016 are discussed below:- Inflation Adjustment Factor (IRAF) The rebased Core Consumer Price Index (CPI) increased from 152.29 in the Base Period to 156.41 in the month of May 2016 as published by the Uganda Bureau of Statistics. The United States Producer Price Index (PPI) increased from 193.2 in the Base Period to 194.8 in the month of May 2016 as published by the United States Bureau of Labor Statistics. The resultant effect is a positive Inflation Adjustment Factor of USh. 1.8/kWh for domestic consumers, USh. 1.5/kWh for commercial consumers, USh. 1.5/kWh for medium industrial consumers, USh. 0.8/kWh for large industrial consumers and USh. 1.6/kWh for street lighting. Exchange Rate Adjustment Factor (FERFAF) The Uganda Shilling depreciated by 0.22 percent against the United States Dollar from Shs 3,357.1/USD in the Base Period to Shs 3,364.5/USD as at the end of May 2016. The exchange rate is the mid-rate of the Uganda Shilling against the United States Dollar as published by Bank of Uganda on 31st May 2016. The resultant effect is a positive Exchange Rate Adjustment Factor of USh. 1.9/kWh for domestic consumers, USh. 1.6/kWh for commercial consumers, USh. 1.7/kWh for medium industrial consumers, USh. 0.9/kWh for large industrial consumers, and USh. 1.7/kWh for street lighting. Fuel Adjustment Factor (FPAF) The Fuel Adjustment Factor is the sum of two components: i.e. changes in the international fuel prices and changes in the energy generation mix. The international fuel price increased from US$44.3 per barrel used in the determination of the Base Tariffs to US$46.83 per barrel as at the end of May 2016, resulting into a positive Fuel Adjustment Factor of USh 1.0/kWh for domestic consumers, USh 0.8/kWh for commercial consumers, USh 0.8/kWh for medium industrial consumers, USh 0.8/kWh for large industrial consumers and USh 0.8/kWh for street lighting. The energy generation mix changed resulting into a negative Fuel Adjustment Factor of minus USh 29.7/kWh for domestic consumers, minus USh 24.0/kWh for commercial consumers, minus USh 24.2/kWh for medium industrial consumers, minus USh 22.4/kWh for large industrial consumers and minus USh 24.5/kWh for street lighting. The overall Fuel Adjustment Factor is minus USh 28.7/kWh for domestic consumers, minus USh 23.2/kWh for commercial consumers, minus USh 23.4/kWh for medium industrial consumers, minus USh 21.6/kWh for large industrial consumers and minus USh 23.7/kWh for street lighting. The overall impact of the above adjustment factors is a reduction of 2.5 percent in the weighted average end-user Retail Tariffs relative to the quarter two 2016 tariffs . This reduction in end-user tariffs is largely explained by the increased power dispatch from the cheaper Nalubaale-Kiira power complex that replaced the shortfall in power dispatch from Kakira Sugar Limited (KSL) Cogeneration power plant. KSL was out of production in the month of May and part of June 2016, for annual maintenance. Arising from the above adjustments, applicable Quarterly Adjustment Factors for the third quarter of 2016 are as shown in Table 1. Table 1: Applicable Adjustment Factors (USh /kWh) for the period July to September 2016 Customer Category 2016 Base Tariffs Second Quarte r 2016 Approved Adjustment Factors Resultant Retail Tariff for the 3rd Quarter 2016 Percentage change relative to 2nd Quarter 2016 Inflation Adjustment Factor (IRAF) Exchange Rate Adjustment Factor (FERFAF) Fuel Adjustment Factor (FPAF) Total Adjustme nt Factor DOMESTIC CONSUMERS – CODE 10.1 [Low voltage single phase supplied at 240 volts]. 651.0 640.2 1.8 1.9 (28.7) (25.0) 626.0 (2.2 %) COMMERCIAL CONSUMERS – CODE 10.2 [Three phase low voltage load not exceeding 100 Amperes]. 587.0 578.3 1.5 1.6 (23.2) (20.1) 566.9 (2.0 %) MEDIUM INDUSTRIAL CONSUMERS – CODE 20 [Low voltage 415Volts, with maximum demand up to 500 kVA.] 544.9 536.2 1.5 1.7 (23.4) (20.2) 524.7 (2.1 %) LARGE INDUSTRIAL CONSUMERS – CODE 30 [High Voltage 11,000Volts or 33,000Volts, with maximum demand exceeding 500kVA but up to 10,000 kVA] 369.4 361.1 0.8 0.9 (21.6) (19.9) 349.5 (3.2%) STREET LIGHTING – CODE 50 628.4 619.5 1.6 1.7 (23.7) (20.4) 608.0 (1.9%) The Adjustment Factors shall be applicable at peak, shoulder and off peak time of use periods. The Adjustment Factors and the Resultant Retail Tariffs are determined taking into account the cost allocation across the different customer categories. The detailed Tariff Order is available at http://www.era.or.ug. This Schedule of Tariffs for the third quarter of 2016 shall be applicable to all consumer bills raised based on meter readings and Yaka purchases taken in the period July 2016 to September 2016.

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