Originally written by: Ivie Ehanmo (Electricity Lawyer | Legal, Policy and Regulatory Transformation Expert | Energy Law Expert)
The Electricity (Amendment) Act, 2022 (the Act) of Uganda was enacted into Law in May 2022 to amend certain provisions of the Electricity Act (the Principal Act) of 1999, given certain inconsistencies in the law in addition to administrative and structural bottlenecks in the industry.
This Policy Brief seeks to highlight relevant provisions of the Amendment law and their potential implications for the Ugandan electricity sector.
Key highlights include:
– The Act commendably promotes gender equality by stating that one-third of the members of the Ministry must be women.
– The Authority is now charged with the responsibility of reviewing and approving the rates and charges of licensees and is no longer responsible for advising the Minister regarding the need to embark on electricity sector projects.
– The new Act is forward-looking in its provisions in that it prescribes that one of the functions of the Authority will be to prescribe standardized feed-in tariffs for renewable energy systems generating up to a maximum capacity of 50MW or any other capacity as determined by the Authority.
– The Minister is now vested with the responsibility of developing energy plans and policies for coal, renewable energy, and electricity.
– In the new Act, an invitation to license applications by the Authority will not be conducted without due consultations with the Minister, thus creating regulatory uncertainty in the sector.
– Licenses are to be classified according to the size and technology to be used or the market segment to be served by the licensee, thus allowing for tariff differentiation based on license class.
– By the Act, the System Operator is not obligated by statute to publish standardized tariffs based on avoided cost of the system for sales of renewable electricity up to a maximum capacity of 20 Watts.
– The Authority may now prescribe terms under which a licensee may supply the electricity in bulk to a holder of a distribution license, transmission license or to a specified class of customers.
– As a requirement for applying for a distribution licence, the licensee must include a net metering plan for all customer categories.
– The Amendment Act has notably increased the rate of fines and imprisonment and new offences that did not exist in the Principal Act have been created.
Although the Ugandan Electricity (Amendment) Act, 2022 is a welcome development, effective implementation will be key to realising the potential of the overall provisions of the Act. Further policies, action plans and regulatory instruments should be developed to harness the potential of key areas within the Act such as renewable energy utilisation, net metering, feed-in tariffs, license classifications, etc.
Read more in the Policy Brief.