Kenya Power currently claims that the proposed rise in electricity rates is based on resources needed for the sector’s viability as public comment begins tomorrow.
The utility company said it took into account the full value chain, from power generation, purchasing, distribution, and retail, which covers the income needed by all parties, when seeking an increase in energy pricing yesterday.
This occurs despite the fact that Kenya Power is still bound by pricey thermal power contracts with Independent Power Producers (IPPs).
With 11% of the power produced for sale by producers, it is the third-highest generation source after geothermal and hydro.
Kenya Electricity wants to raise power prices by an average of 40% with the new proposed tariffs. This is in addition to prices for fuel and energy, fluctuating foreign exchange rates, inflation adjustments (which alter annually or biannually), the monthly WARMA Water Levy, Value Added Tax (currently at 16%), and the Rural Electrification Program (REP) Levy, among others.
If the Energy and Petroleum Regulatory Authority (EPRA) approves the new Kenya Power tariffs, which are anticipated to take effect on April 1, the price of electricity might rise by up to 78%.
Kenya Power has changed the consumption brackets in the plan, which will subject more consumers to higher rates. With a recommendation that the group pays Sh14 per unit, up from Sh10, the zero to 100KWh hour band, for instance, has been cut to zero to 30KWh.
The Kenya National Bureau of Statistics’ lowest monthly consumption estimate of 50 units per family translates to an increase in power costs of Sh700 from Sh500 to Sh700. Over 100Kwh users would now pay Sh21.68 per unit, up from Sh15.6, with extra fees and levies driving up prices even more. Small businesses using up to 30Kwh will now pay Sh14 per unit, an increase from Sh10.
Over 100 units will cost Sh21.08, an increase from Sh15.6 per unit.
Households using between 0 and 30 kwh per month would pay Sh23.1 per unit, an increase from Sh20.5; those using more than 30 kwh per month will pay Sh31.6 per unit, an increase from Sh26.4.
Large consumers, primarily manufacturers that have been paying Sh12 per unit, will now pay Sh16.48 per unit, but they can save money by using power off-peak, when Kenya Power has suggested they pay Sh8.24 per unit.
“We want to encourage them to produce more during these macho late-night hours. Geoffrey Muli, the interim managing director of Kenya Power, stated during a briefing in Nairobi yesterday that this is how we can transition to a 24-hour economy. The final price will be significantly greater because the costs do not include levies and other fees.
Muli claims that while the nation strives to achieve its ambitious goal of achieving universal connectivity by the year 2026, power generation prices have climbed recently, which explains the upward adjustment to assure dependable and high-quality electricity.
However, the proposed increase is unexpected given that the law mandates that tariffs be reviewed every three years, with the most recent assessment being in 2018. However, the assessment has been postponed due to government interventions to support households, particularly in 2021 when a consumer subsidy was extended.
Most of the time, the identities of persons who own those IPPs are kept secret, while certain corporations do have political backing and shareholdings from powerful figures from previous administrations.
The increased taxes that has resulted in consumers receiving fewer tokens has angered them. With the proposed tariff rise, consumers are now at EPRA’s mercy, and President William Ruto’s pledge of cheaper power is now just a pipe dream.