Power Crisis Looms Over Govt Entities Failure To Pay Bills Top story


In short
Uganda could once again be plunged into load-shedding if the government doesn't find the money to pay electricity arrears owed to Umeme. In a letter to the Permanent Secretary, Ministry of Energy from the Electricity Regulatory Authority (ERA) and seen by URN, the regulator warns of massive load-shedding if Ugx88.33billion [Ugx44.7bn from last financial year] is not found and paid to the Uganda Electricity Transmission Company Limited (UETCL).

Uganda could once again be plunged into load-shedding if the government does not find the money to pay arrears owed to power distributor Umeme Ltd.
Electricity Regulatory Authority (ERA) warns of massive load-shedding in a letter to the Permanent Secretary Ministry of Energy if Ugx88.33billion is not found and paid to the Uganda Electricity Transmission Company Limited (UETCL).   
The letter, dated 29th September 2014, read that as a result, "UETCL will not be able to meet its liabilities, including payment of electricity generators."
The looming power crisis stems from failure by some government institutions to pay their electricity bills. According to the letter, Umeme withheld money to UETCL from bulk supply of electricity, to cater for its distribution costs.
"…the company [Umeme] again withheld Ugx26.19bn in September 2014 and further intends to withhold another Ugx17.6bn on account of failure by government ministries and departments to pay electricity bills," the letter reads.
At least Ugx44.7billion was withheld in the last financial year over unpaid dues from government institutions like; Ministry of Defense, Uganda Prisons Service and the Uganda Police among others. In July 2013, Umeme withheld Ugx18.3billion.
UETCL purchases electricity from the power generators, Bujagali Energy Ltd and Eskom and sells it to Umeme, which distributor it to customers on the national grid.  
In making payments, Umeme will deduct what is due to it (17percent of the tariff) before it remits the rest to UETCL to pay the power generators.
Transmission CEO Eriasi Kiyimba, notes in a letter to ERA dated 25th September 2014, that UETCL was facing "serious cash-flow challenges."
"The effect of all this is that it will not be able to pay power generators due to tax invoices for supplied energy and there is a likelihood of massive power load-shedding across the country should the generators exercise the right not to generate power because of UETCL default on payments," Kiyemba writes.
Kiyemba told URN that they are now engaging Umeme Ltd and Energy ministry to have the matter resolved before the "reasonable time" expires.
To help resolve the matter, UETCL and ERA, have asked the Finance Ministry to deduct the money due to Umeme from entities budget. Finance has however rejected the request, saying it is the responsibility of the government entities to pay their own bills.
"The Ministry of Finance does not micro-manage funds that are allocated to ministries and departments….this role is left to accounting officers who are experts at ensuring prudence and that the resources available to them are allocated as agreed within their budget," Ministry of Finance Spokesperson Jim Mugunga told URN.
Umeme, prior to 2013 had the option of withdrawing money from an escrow account. By end of 2013, the account had no more money.
Ministry of Internal Affairs Ministerial Statement for June 2014, show that the Uganda Police has unpaid electricity arrears of Ushs17.8billion while the Uganda Prisons Service has arrears totaling Ushs14.4billion.  The Ministry of Defense owed Ushs22bn in electricity arrears by end of last financial. Other entities, according to the 2012/13 Office of the Auditor General Annual Report include, National Medical Stores, Public Service Commission and National Agricultural Research Organisation among others.