Expect drop in power bills, says PS

December 16, 2008

, NAIROBI, Kenya, Dec 16 – The government has forecasted that electricity bills will come down significantly by the end of December.

Energy Permanent Secretary Patrick Nyoike predicted that the fuel cost which is a major component in the computation of the bill will drop from the Sh7.78 recorded in July to below Sh3.50 per kilowatt hour by the end of this month.

“That would mean that the prices would have come down by Sh4.28 per kilowatt hour and the weather is now good, we are getting more hydro generation,” he said while referring to the rains that were experienced late last month.

He disclosed that the government would soon commission a number of new power plants with a capacity to inject more than 50 Megawatts of electricity which will further contribute to reduced prices.

The Kiambere power station, he said, which has not been in operation since April 2008 would be re-opened in January and is expected to add about 82 Megawatts (MW) while the commission of the Mumias Power Plant would add about 30 MW.

“Sondu Miriu is also doing very well. It is generating 60MW in 24 hours,” the PS enthused.

Kenyans have been paying high electricity prices since July 1 following the release of a new tariff structure by Energy Regulatory Commission (ERC) that saw the costs go up by approximately 24 percent before taxes.

And they didn’t get any reprieve when the costs of crude oil in the global market went up to $147 per barrel during the same month.

The high cost of energy was negatively impacting on both individuals and companies who at some point threatened to relocate to other countries. This prompted the government to act and on October 31 Acting Finance Minister John Michuki announced a four percent reduction on the Value Added Tax (VAT) on electricity energy from 16 percent to 12 percent.

A number of Kenyans have complained that they have not felt the impact of the reduction.

However Mr Nyoike clarified that the VAT reduction could not have made any major impact on power bills for domestic consumers saying the drop was a meagre 3.45 percent.

“How can a four percent drop in VAT translate into a 35 percent reduction in prices? Its not possible,” he posed.

Mr Nyoike however reiterated the government’s commitment to ensuring efficient and cost effective delivery of power to Kenyans.

The government is soon expected to register the proposed Geothermal Development Company and National Electricity Transmission Company which will go a long way in helping it realise this dream.

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