Rwanda Utilities Regulatory Authority (RURA) on Tuesday increased power tariffs for large residential customers and industries but slashed tariffs for healthcare facilities and data centres.
The tariff for healthcare facilities has been revised from Rwf192 per kilowatt hour (KWh) to Rwf186 per KWh, a reduction of 3 per cent in new tariffs that will come into effect next week on Tuesday.
The regulator said evaluation conducted showed that large healthcare facilities have equipment that consume more power than small industries, which informed the reduction.
RURA Director General Patrick Nyirishema said on Tuesday that this will have an effect on the way healthcare services are provided.
“We found it necessary to reduce the tariff for healthcare establishments to facilitate them to provide services at an affordable rate to every Rwandan,” he said.
The tariff of commercial data centres have been reduced from Rwf222 per kWh to Rwf179 in a bid to promote data centres.
There are currently three commercial data centres in the country, including the National Data Centre (AoS) while the other two are owned by local telecoms MTN Rwanda and Airtel Rwanda.
Nyirishema said during a news briefing that data centres are critical infrastructure that require a lot of electricity to operate.
“Data centre is where hosting of applications and content data happens. And so as part of the efforts to promote data centres, the tariff was reduced,” he explained.
As Rwanda continues to progress on the journey towards ICT development and making Rwanda an ICT hub, Nyirishema added, the need to have more of these centres in the country rises.
“We also intend in future to even do a further reduction. As time progresses will continue to analyze the impact of electricity on data centers,” he noted.
RURA maintained lifeline tariffs – residential customers who consume only 15 kilowatts – at Rwf89.
Tariffs for water treatment plants and water pumping stations were also maintained at Rwf126 kWh.
Residential tariff up
Residential customers who consume between 15 and 50 kilowatts per month will now be paying Rwf212 per KWh instead of Rwf182, while those who consume beyond 50 kilowatts per month will be paying Rwf249 per KWh instead of Rwf210.
For non-residential customers with monthly consumption of 100 kilowatts, the new price is Rwf227 per kWh, while customers consuming more than 100 kilowatts, the new tariff is Rwf255 per kWh
The Government also increased tariffs for small, medium and large industries but RURA indicated that industrial customers are given incentives depending on the time of operations.
This is made possible because of the Government’s annual subsidy of Rwf10.5 billion.
According to RURA, electricity tariffs were reviewed in order to meet the required operational and investment expenditures for the Energy Utility Corporation Limited (EUCL).
Rwanda Energy Group (REG) chief executive, Ron Weiss attributed the increased tariffs to the increased production of electricity, as well as activities related to the expansion and maintenance of the network.
“The production of electricity involves a lot of components the first and most expensive one is paying the independent power suppliers,” he explained.
Independent power suppliers who invested in behalf of the government are paid in foreign currency, especially in dollars.
When the dollar fluctuates, it increases the cost of production.
The second component highlighted by REG CEO is the high cost of fuel that run energy plants, which is also imported.
Weiss said they have been able to reduce electricity loses from 23 per cent to 19 per cent currently.
“The big challenge that we have these days is a people that are bypassing the metres and stealing electricity,” he said.
The cost of running operations, Weiss said, is Rwf186 per kilowatt hour.
The tariffs where last revised in August, 2018 but the regulator says they will now be adjusting tariffs every quarter to cater for fluctuating costs which are beyond the control of the energy utility provider such as currency exchange rates, and fuel cost.
Currently, there are 1.4 million energy customers representing 53 per cent of population coverage. 1 million clients are connected to the grid while the 400,000 are on off-grid.
Similarly, there are 2.8 million households across the country that need to be connected. This means there are 1.4 million unconnected households.
The Government has a target of connecting all these households by 2024, which Weiss said is achievable but it could cost somewhere around $850 million.
Source: New Times