Electricity tariffs to rise by 20 per cent

State-run Energy Water and Sanitation Authority has requested energy regulator, Rwanda Utilities and Regulation Authority (RURA), for a tariff hike to cover part of an estimated US$10m per year but also allow government focus on power generation.Government would have to pay a total of Rwf24 billion as subsidies but that would drop to Rwf17.9 billion as a result of the tariff increase.“With the changes, EWASA is expecting to break-even come the year 2014, that is at least moving from negative balance to zero balance,” said Francois Regis Gatarayiha Director General of RURA.Effective July 1, 2012, tariffs for domestic, commercial, medium industries, large industries consumers and street lighting will increase to Rwf134 from Rwf112 per unit.RURA says government pays US$3 million per month on oil used by generators used at Agreco and Jabana plants.Addressing the press, Gatarayiha said since 2006, there has been no tariff review and a lot has changed, especially the depreciating of the Rwandan franc against major international currencies as well as an increase in fuel prices.“We have recorded 10 percent depreciation against the dollar and figures from national bank of Rwanda show cumulative inflation is beyond 40 percent since 2006,” he said.“The government has been pumping a lot of subsidies and they would continue, but it wants EWSA to be a selfsustaining utility; they don’t actually help the utility to develop,” Gatarayihaemphasised.Prices of the Time of Use Tariffs (TOU) from 7h to 17h00, which is regarded as the standardhour, have increased to Rwf126 from Rwf105 per kW hour, while those from 17h00-23h00 have increased to Rwf168 from Rwf140. The lowest usage hours from 23h00 -7h00 are now set at Rwf96 from Rwf 80. All the prices exclude Value Added Taxes (VAT). The lowest usage targets the industrial sector.Gatarayiha said that before 2006, electricity tariffs cost US$20.2 cents per kW hour, but driven by depreciation of the Rwandan Francs it now stands at US$18 cents while other neighbouring countries (Uganda’s retail and Kenya’s industry) are at US$21 cents.“Not adjusting these electricity prices when we know that inflation has not been stopping is irresponsible on the side of government and the regulator who should work together to ensure a sustainable utility, a utility that consolidates and mitigates the effects of inflationary pressures,” he said. The Director General of EWSA, Yve Muyange, said the institution has put in place measures to curb electricity fraud through installation of anti-fraud metres.Other measures taken include the TOU system with electronic metre which is monitored by the user as well as EWSA.“Measures are in place like grid audit but it’s an ongoing process. We used to lose 35 percent which has reduced 20, but we want to reduce even further,” he said.The number of electricity users increased to 286,000 from 109,000 four years ago.Rwanda highly relies on hydro-electric power. The Mukungwa, Ntaruka,Rukarara and Rusizi hydro-electric plants are expected to contribute over 60 MW while thermal energy contributes 37MW

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Electricity tariffs to rise by 20 per cent