Electricity bills hit record high as State offers 15pc discount

Electric meter fixing illustration. PHOTO | PHOEBE OKALL | NMG

By JOHN MUTUA
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Summary

• The Energy and Petroleum Regulatory Authority (Epra) in a notice, said fuel cost charge (FCC) has increased to Sh4.63 from Sh4.21 last month.
• A rise in the fuel surcharge increases the cost of power by reducing the number of units consumers get for a similar amount of money.
• Kenya Power will cut the cost of electricity by 15 percent in the January bills in a State-driven push to ease the burden of bills on households and businesses.

Electricity bills for December will hit a high of three-and-half years on fuel surcharge rising to the highest rate since June 2018 as the State prepares to offer consumers a 15 percent discount on the cost of power.

The Energy and Petroleum Regulatory Authority (Epra) in a notice, said fuel cost charge (FCC) has increased to Sh4.63 from Sh4.21 last month — the highest in three-and-half years, setting the stage for the highest cost of power since June 2018.

A rise in the fuel surcharge increases the cost of power by reducing the number of units consumers get for a similar amount of money.

The record-high fuel surcharge comes a month before Kenya Power effects a 15 percent reduction in the cost of power — the first phase of a 30 percent cut on electricity costs.

“Notice is given that all prices for electrical energy specified in Part II of the said Schedule will be liable to a fuel energy cost charge of Plus 463 Kenya cents per kWh for all meter readings to be taken in December 2021,” said the Epra in a notice.

The energy regulator did not disclose what prompted the increase in the surcharge, but it comes at the back of costly crude oil due to demand growth in the global market.

The last time the levy was higher than this month was in June 2018 when it hit 4.75.

Kenya Power #ticker:KPLC will cut the cost of electricity by 15 percent in the January bills in a State-driven push to ease the burden of bills on households and businesses.

The State had targeted to slash electricity bills 33 percent by Christmas but dropped the plan and opted to reduce the costs in two tranches of 15 percent following opposition from independent power producers (IPPs) who supply electricity to Kenya Power.

The second phase is expected in the first quarter of next year.

The IPPs argued that Kenya has no unilateral right to alter the contracted capacity and payments, saying instead that the State has to protect PPAs — which are inked over a period of 20 years.

The 15 percent drop in the cost of power is equivalent to Sh18.8 billion based on Kenya Power sales of Sh125.9 billion in the year to June. This has the potential to pull Kenya Power back into losses without a substantial reduction in power theft and leakages.

The fuel surcharge has been on a steady rise from Sh3.77 in August prompting the State to intervene and lower the cost of electricity amid the economic fallout of the Coronavirus pandemic that has hurt the spending power of households and businesses.

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