Kenyans to pay more for electricity

June 26, 2008
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, NAIROBI, June 26- Kenyans should brace themselves for higher electricity charges beginning 1st July 2008, officials have said.

This followed the release of a new tariff structure on Thursday by Energy Regulatory Commission (ERC) that announced that the prices would go up by approximately 24 percent before taxes.

The increase was triggered by submissions by electricity generating company KenGen and distributor KPLC to the Commission of Power Purchase Agreements (PPAs) seeking to have the KenGen bulk tariffs reviewed with effect from 1st July.

An Interim Power Purchase Agreement (IPPA) signed between KenGen and KPLC in 1999 outlined how the power distributor would buy power from the generating firm at Sh2.36 per kWh.

However in 2003, the IPPA was adjusted, reducing KenGen’s bulk tariff by 60 cents from Sh2.36 per kWh to Sh1.76 per kWh for a period of three years between 1st July 2003 and 30th June 2006.

The government has been subsidizing KPLC by paying Sh0.60 per unit of electricity supplied by KenGen. The subsidy however ends on 30th June 2008 thus necessitating the adjustment of the tariffs.

Making the announcement at a press conference, ERC Director General Eng John Mwirichia said the new tariff would be categorized in five main groups, all of which would include four main levies including energy, demand and fixed and fuel cost charges.

All these, he said, would be used to work out how much the consumers would pay for power consumed.

The groups include Domestic Consumers (DC), Small Commercial (SC), Commercial/Industrial (CI), the Interruptible (IT) and the Street Lighting (SL).

"The DC will be applicable to domestic consumers metered at 240 Volts (V), or 415V and whose energy consumption does not exceed 15000 kilowatt per hour (kWh) per month," he said.

The energy charge, he added, would be in three steps based on consumption as follows; 0-50kWh; 51-1500kWh and over 1500kWh.

This category will pay a charge of Sh120 per month, Sh2 per kWh for 0-50 units consumed, Sh8.10 per kWh for 51-1500 units consumed and a Sh18.57kWh for units consumed above 1500.

Small commercial would also be metered at 240V or 415V with monthly energy consumption which does not exceed 15000kWh.

"They will pay a fixed charge of Sh120 per month and an energy charge of Sh8.96 per kWh," Mwirichia added.

The fixed charge for the CI category will range from Sh800 to Sh11,000 per month and so will be the energy and demand charges.

"In order to enhance greater transparency, a new Foreign Exchange Rates Fluctuations Adjustment (FERFA) formula has been adopted," he said.

"In the same vein, the Commission has approved new Base Exchange Rates for the tariff review period," he added.

Mwirichia said the new costs take into effect the rising inflation and the high costs of fuel, adding that there would be a new formula for working out fuel costs per unit of consumption per month.

"This is the cost of all the fuel used to generate electricity in a given month divided by all units consumed in that month," the DG explained.

He said the changes were necessary as they would ensure improvements in the quality of power supply as well as attract investments in new power generation.

Further, Mwirichia said that the commission had abolished the special low prices enjoyed by Kenya Power and Lighting Staff and facilities.

"KPLC staff will be treated like any other domestic consumers," he stressed.

Mwirichia urged Kenyans to practise energy conservation and efficient measures to mitigate against the high costs.

He advised the use of energy efficient lighting bulbs, the installation and use of solar water heaters and greater discipline with switching off lights and equipment that are not in use as some of the safeguarding measures that consumers should take.

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