Power tariffs to remain static

September 19, 2008
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, NAIROBI, September 19 – The management of the Kenya Power Lighting Company and the Kenya Electricity Generating Company have assured consumers that power prices would not increase following a court ruling that they stick to existing tariffs until a dispute before the electricity tribunal is determined.

The two firms told Capital Business in an interview that they expected the tariff tussle between KPLC, KenGen and the Energy Regulatory Commission to be resolved within 60 days.

“The three parties have committed that whatever the final outcome of this case, the price for the end consumer will not change,” KPLC Managing Director and Chief Executive Joseph Njoroge said.
                                                                                 
The cost of electricity has doubled in the month of August for many households after the Kenya Power and Lighting Company announced an increase in electricity unit prices, attributing it to a rise in the cost of fuel worldwide.

There was concern among the public that if the electricity tariff rates were reviewed upwards again, it would result in higher power charges.

The KenGen and KPLC management gave assurance that the status quo would remain despite the Energy Regulatory Commission’s ruling on Thursday that favoured KenGen which had requested a higher tariff.

Njoroge further explained that the dispute was not between KPLC and KenGen but between KenGen and ERC on the interpretation of tariff rates between the two companies.

The Energy Tribunal in its ruling ordered that KenGen continue to bill Kenya Power and Lighting Company (KPLC) at the old rate of Sh2.36/Kwh, until an appeal lodged by the power generator is heard and determined.

Despite agreeing with his colleague on the impact of the dispute on consumer electricity prices, KenGen Managing Director Eddy Njoroge noted that unless the actual cost of supplying electricity to the end user was determined soon, the country would continue struggling with the ever-increasing electricity prices.

“The ERC is the one that looks at our books and knows what is the cost of generation. They look at KPLC and see what the cost of transmission is; what the cost of distribution is, and how much return they will give to KPLC and KenGen in terms of profitability.  After adding up all that, they should come up with what the real cost should be,” he explained.

He said after this, determination should be made who would meet the difference, if the consumer was unable to afford the cost they come up with.

The MD observed that unless this was done, it would difficult for the country to satisfy the current demand for electricity at fair prices and further meet future demands.

On July 29, KenGen filed an appeal at the Energy Tribunal seeking orders to set aside an ERC decision of June 30 prescribing lower charge rates to be used in computing KenGen revenues for the energy supplied to KPLC.

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