KPLC: Fuel prices to blame for high bills

July 30, 2008

, NAIROBI, July 30 – The Kenya Power and Lighting Company (KPLC) has attributed the unexpectedly high power bills for July to a higher fuel cost charge levied by electricity generators.

KPLC Managing Director Joseph Njoroge said Wednesday that the fuel charge had gone up by 42% per unit of electricity consumed in July, in addition to the average 25% increase in tariffs charged on the basic consumption, announced in June.

Njoroge explained that the fuel charge, ERC levy, rural electrification levy and Value Added Tax (VAT) constituted 55 percent of an average power bill.

The fuel charge, which went up from Sh4.56 in May to Sh6.49 per unit consumed in June, was one of the factors that made the July bills almost double.

In response to a public outcry that it had invoiced consumers more than the widely expected increment, the utility company explained that the 25 percent extra charge imposed in June only affected the basic tariffs, which are subject to the amount of electricity consumed.

“The tariff rate does not include the cost for the amount of fuel used in the generation of electricity from thermal power stations, which is shown separately as Fuel Cost Charge in the power bill,” said Njoroge.

The cost of fuel used in thermal generation is passed on to the consumers.

Under normal rainfall conditions, hydro constitutes up to 60 percent of electricity sold to consumers, while 24 percent and 16 percent comes from thermal and geothermal respectively.

In the period between December 2007 and June 2008, when hydro-dams had inadequate water, thermal generation increased from 25 percent to 36 percent, a move that contributed to the high fuel cost charge.

“About 70 to 75 percent of this amount is paid to the generators of electricity including KenGen, Independent Power Producers (IPP) and the Emergency Power Producer (Aggreko),” he stressed, as payment for the respective amounts of electricity they generate and sell to KPLC.

“Once the hydro conditions improve, hydro-electricity will be increased and customers will experience some relief in their bills as a consequence of reduced thermal generation,” the MD predicted. 

Njoroge also asserted that the company would not extend deadlines for payment of the bills, as requested by the Kenya Alliance of Resident Associations (KARA).

“KPLC is at the tip-end. We have to pay for electricity supplied, we have to remit our taxes, so we cannot afford to give our customers a grace period,” he added.

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