ANNUAL REPORT 2015 – 16 1 ANNUAL REPORT 2015 - 16 The cover photograph is of the 10 MW Access Uganda Solar Plant, the first-ever Grid-connected Solar Photo Voltaic plant in Uganda, which was licensed by ERA in the financial year 2015/16. 2 ANNUAL REPORT 2015 - 16 ANNUAL REPORT 2015 – 16 3 ANNUAL REPORT 2015 - 16 Stakeholders at the GETFiT Forum Dinner and launch of ERA’s new corporate identity. iv ANNUAL REPORT 2015 - 16 Table of Contents 1.0 WHO WE ARE .................................................................. 1 3.7 Quality of Service...................................................... 21 1.1 Our Functions .............................................................. 1 3.8 Energy Efficiency .......................................................21 1.2 Strategic Objectives .................................................. 2 3.9 Improvement of the Distribution Network .............. 22 1.3 Our Vision .................................................................... 2 4.0 MONITORING AND ENFORCEMENT OF COMPLIANCE .. 23 1.4 Our Mission .................................................................. 2 4.1 Statutory Inspections ................................................ 23 1.5 Our Core Values ......................................................... 2 4.2 Environmental Monitoring and Compliance ........ 23 1.6 Regulatory Principles .................................................. 3 5.0 PERFORMANCE OF THE ELECTRICITY SUPPLY INDUSTRY .. 25 Members of the Electricity Regulatory Authority .............. 4 5.1 Loss Reduction .......................................................... 25 The Management Team ...................................................... 5 5.2 Energy Purchases and Sales by UETCL ................... 25 Statement by the Chairman ............................................... 6 5.3 Energy sales by distribution companies ................. 26 Chief Executive Officer’s Report ......................................... 8 5.4 Customer connections ............................................ 27 2.0 GOVERNANCE STATEMENT ......................................... 10 6.0 SECTOR INVESTMENTS .............................................. 28 2.1 Composition of the Board ........................................10 6.1 Approved Investment Plans .................................... 28 2.2 Profile of the ERA Board Members .............................10 6.2 Audit of Completed Investments ........................... 28 2.3 Conduct of Meetings of the Authority ................... 12 7.0 CONSUMER PROTECTION ......................................... 30 2.4 Committees of the Authority ................................... 12 7.1 Public Outreach ....................................................... 31 2.5 Authority Meetings and Decisions .......................... 15 8.0 EXTERNALLY FOCUSED ACTIVITIES ........................... 32 3.0 POWER SUPPLY SECURITY AND SUSTAINABILITY ......... 17 8.1 Stakeholder Engagement ....................................... 32 3.1 Electricity Generation .............................................. 17 8.2 ERA Profiling .............................................................. 34 3.2 Projects under Development .................................. 17 9.0 HUMAN RESOURCE AND ADMINISTRATION ............ 36 3.3 Licensed Projects under construction .................... 18 9.1 Training and Development ..................................... 36 3.4 Special Projects under development .................... 19 9.1.1 Trainings of Staff ........................................................ 36 3.5 Projects at feasibility study ....................................... 19 9.1.2 Recruitments in 2015/16 ........................................... 36 3.6 Electricity Transmission ............................................. 19 9.1.3 Staff Welfare ............................................................. 37 v ANNUAL REPORT 2015 - 16 9.2 Capital Development (New ERA House) ............... 37 List of Abbreviations 10.0 FINANCIAL PERFORMANCE ..................................... 38 11.0 Annual Financial Statements .................................. 39 AfDB African Development Bank 11.1 Management Responsibility ................................... 39 BECS Bundibugyo Energy Cooperative Society 11.2 Auditor’s Responsibility ............................................ 40 DSM Demand Side Management 11.3 Opinion ...................................................................... 40 STATEMENT OF FINANCIAL POSITION AS AT JUNE 30, 2016 ... 41 ERA Electricity Regulatory Authority STATEMENT OF COMPREHENSIVE INCOME FOR THE PERIOD ESI Electricity Supply Industry ENDED JUNE, 2016 ...................................................................... 42 FY Financial Year STATEMENT OF CASH FLOWS FOR THE PERIOD ENDED JUNE 30, 2016 ........................................................................................................ 43 IAS International Accounting Standards STATEMENT OF CHANGES IN EQUITY AS AT JUNE 30, 2016 .. 44 IFRS International Financial Reporting Standards NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL JICA Japan International Cooperation Agency YEAR ENDED JUNE 2016 ......................................................... 44 MW Mega Watts NSSF National Social Security Fund Pader Abim Community Multi-Purpose Electric PACMECS Co-operative Society Limited PAYE Pay As You Earn QoS Quality of Service REFiT Renewable Energy Feed-in Tariff UMA Uganda Manufacturers Association URA Uganda Revenue Authority vi ANNUAL REPORT 2015 - 16 The Board of the Electricity Regulatory Authority, October 2015 to-date. vii ANNUAL REPORT 2015 - 16 List of Tables and Figures Table 1: Human Resource Committee attendance ...........13 Table 2: Audit Committee Sittings ........................................ 14 Table 3: Authority Members’ attendance ........................... 15 Table 4: Licensed Projects in the FY 2015/16 ....................... 17 Table 5: Projects under construction ................................... 18 Table 6: Investments approved by the Authority for Umeme Limited .................................................................................... 29 Table 7: Staff recruited in 2015/16 ........................................ 29 Table 8: ERA Staff compliment in 2015/16 ........................... 35 Figure 1: Authority Decisions per Month .............................. 16 Figure 2: Generation Mix of Uganda ................................... 17 Figure 3: Sales by UETCL for the years 2014/15 ................... 25 Figure 4: Growth (%) in sales by distribution licensees ....... 26 Figure 5: Energy sales by other licensees (excluding Umeme) ... 26 Figure 6: Number of customers by distribution licensee ..... 27 Figure 7: Complaints registered by ERA during FY 2015/16 ... 30 ERA staff inspect network accessories in the Ferdsult Distribution concession. viii ANNUAL REPORT 2015 - 16 1.0 WHO WE ARE The Electricity Regulatory Authority (ERA) is a statutory body (g) To approve rates of charges and terms and conditions established in 2000, in accordance with the Electricity of electricity services provided by transmission and Act, 1999, Chapter 145, Laws of Uganda. The Authority distribution companies; is mandated by the Act to regulate the generation, transmission, sale, export, import and distribution of electrical (h) To review the organisation of generation, transmission energy in Uganda. and distribution companies or other legal entities engaged in the generation, transmission and distribution of electricity to the extent that that 1.1 Our Functions organization affects or is likely to affect the operation The Authority is statutorily charged with the following of the electricity sector and the efficient supply of functions, under Section 10 of the Electricity Act, 1999:- electricity; (i) To develop and enforce performance standards (a) To issue licences for: for the generation, transmission and distribution of (i) the generation, transmission, distribution or sale electricity; of electricity; and, (j) To encourage the development of uniform electricity (ii) the ownership or operation of transmission industry standards and codes of conduct; systems; (k) To establish a uniform system of accounts for (b) To receive and process applications for licences; licensees; (c) To prescribe conditions and terms of licences issued (l) To advise the Minister regarding the need for under the Act; electricity sector projects; (m) To prepare industry reports and to gather information (d) To modify licences issued under the Act; from generation, transmission and distribution (e) To make and enforce directions to ensure compliance companies; with licences issued under the Act; (n) To prescribe and collect licence fees; (f) To establish a tariff structure and to investigate tariff (o) To provide for the procedure for investment charges, whether or not a specific complaint has programmes by transmission and distribution been made for a tariff adjustment; companies; 1 ANNUAL REPORT 2015 - 16 (p) To approve standards for the quality of electricity Distribution. supply services provided; (e) Promote Reasonable and Fair pricing of Electricity (q) To approve codes of conduct in respect of the Services. operation of transmission and distribution systems; (f) Promote Objectivity, Transparency and Accountability (r) To acquire information and carry out investigations to stakeholders. relating to any of its functions; and (g) Enhance good Governance, Internal operating (s) To perform any other function that is incidental