Umeme in bid to reduce power distribution losses

KAMPALA

The electricity distributor, Umeme Uganda Ltd, has commissioned a study on distribution losses. In a submission to the Electricity Regulatory Authority (ERA) , Umeme said the findings of the study would give an accurate breakdown of each type of loss and to help the power distributor to devise better strategies to tackle each.

“A 50:50 breakdown of losses between technical and non-technical has been assumed. [This] study will inform Umeme, in 2013, on a proper breakdown between technical and non-technical losses,” Umeme said. According to the 2011 Study on Distribution System Losses and Collection Rates, the power distributor has no way, at present, of measuring the breakdown of the losses by type.

Mr Charles Chapman, Umeme’s managing director, did not reply the Daily Monitor’s request for details. Mr Tuzinde Mbaga, the ERA’s economist, told this newspaper yesterday that each per cent loss costs the country Shs12 billion. This, therefore, means that for each reduction in distribution losses, the country would save Shs12 billion.

Energy losses are got by subtracting the energy bought less the energy sold. The government compensates the distribution company for losses that fall within the set target. Since it took over the distribution business in 2005, the company has reportedly reduced losses from an estimated 38 per cent then to 27 per cent (2011). This has been achieved through operations to net people illegally connected to power and because ERA has been setting tighter loss targets for the company.

Umeme is, however, performing poorly compared with Kenya’s as well as with Tanzania’s electricity distributors, whose losses are at 16 per cent and 17.76 per cent respectively.

In April 2012, Umeme protested to the World Bank against ERA’s proposal that it should reduce losses to 26.6 per cent by the end of this year. The distributors said reducing losses to 26.6 per cent would have had an “adverse impact on its finances”.

The Ad hoc Committee of Parliament on Energy in an October 2012 report claimed that Umeme lacked the commitment to lowering distribution losses significantly because it is compensated through the loss-allowance when computing the tariffs. Among other recommendations, the committee said Umeme be compelled to install prepayment metres to reduce commercial losses – theft by consumers who bypass metres.