Participants of a June 2015 partnership exchange discuss regional cost allocation issues in Kampala, Uganda.
As East Africa moves toward a regional market for electricity trade, investment in the energy sector is the cornerstone of expanding electricity services and promoting economic development. As of 2017, there are a number of infrastructure projects underway or in planning stages across East Africa, including large-scale generation and cross-border interconnectors.
While these projects will go a long way in meeting new demand and enabling cross-border power trade, additional investment, including upgrades and expansion of existing infrastructure, will be necessary to ensure that the power gets to the consumers who need it.
With the support of the United States Agency for International Development and Power Africa, NARUC supported regulators from Rwanda, Tanzania, Ethiopia, Kenya and Uganda, along with representatives from the Independent Regulatory Board (IRB) of the Eastern Africa Power Pool, to enhance and align regulatory accounting practices in East Africa.
By engaging regulators at a regional level, NARUC provided a platform for information sharing between otherwise isolated national regulators, ensuring capacity building flowed between countries and benefitted the region overall. Regulators shared lessons learned and discussed common challenges to help identify solutions, acting as peer-to-peer partners in problem-solving and encouraging each other to utilize international best practices.
Through NARUC support, participating regulators in 2016 finalized a regionally harmonized Uniform System of Accounts and a financial data collection template. These tools will help the countries unlock the energy potential of the region by providing a foundation for harmonized regional accounting to enable regulators to correctly and transparently determine and compare costs associated with generation, transmission and distribution across borders.
The regionally aligned USoA also serves to spur regulators to revise national USoAs in line with the regional product. Alignment between national USoAs will help regulators more easily resolve disputes over power and transmission pricing and support proper cost allocation of transmission lines and other regional assets.
Kenyan and Rwandan regulators successfully negotiated components of a Wheeling Agreement and approved a Power Purchase Agreement (PPA) to transmit power from Kenya to Rwanda by way of Uganda, utilizing technical knowledge gained through a NARUC partnership exchange, the second wheeling transaction advanced at the time.
Project Dates: 2014-2016 (Closed)
Independent Regulatory Board of the Eastern Africa Power Pool
National Regulators of Ethiopia, Kenya, Rwanda, Tanzania, and Uganda
East African Regulators Finalize Key Regulatory Accounting Tools
With the support of USAID and Power Africa, electricity regulators in East Africa have finalized a suite of regulatory accounting tools that will help promote private investment and cross-border trade in the region.
East African Regulators Move Forward On Cross-Border Trade
With USAID and Power Africa assistance, NARUC helped East African regulators find a “common vocabulary” on financial accounting.