RELIEF

Cost of electricity to drop 33% starting January

President Uhuru Kenyatta appointed the John Ngumi led team late March

In Summary
  • As a consequence, a consumer spending Sh500 per month on electricity will pay Sh330, saving Sh170. 
  • The task force has recommended immediate cancellation of PPAs under negotiation.
A customer in Loresho, Nairobi, keys in tokens in her meter box on April 25, 2018. /ENOS TECHE
A customer in Loresho, Nairobi, keys in tokens in her meter box on April 25, 2018. /ENOS TECHE

The cost of power is expected to drop by 33 per cent starting next year as Kenya plans to do away with expensive Independent Power Producers.

President Uhuru  Kenyatta announced this Wednesday after receiving a report on a task force that has been reviewing Power Purchase Agreements between Kenya Power and Independent Power Producers (IPPs) formed late March.

According to the presidency, cutting of expensive power producers will see a unit of electricity go for Sh16 starting December 31 from Sh24 which is two-thirds of the current tariff. 

As a consequence, a consumer spending Sh500 per month on electricity will pay Sh330, saving Sh170. 

Recommendations from the John Ngumi led the committee are coming a day after the Star reported how IPPs are minting billions from expensive dollar-denominated deals with Kenya Power, a cost passed to consumers. 

For instance, it was revealed that while KenGen sells power to Kenya Power at Sh5.48, other firms are supplying the same quantity at more than 35 times higher. 

Kenya Power's annual report 2020 shows the company spent a total of Sh93.9 billion on fuel and non-fuel produced power, with units coming from IPPs being more expensive.

For instance, it bought a unit at Sh173.08 from Triumph Power Generating Company while Gulf Power Limited sold a unit at Sh121.56.

The task force has recommended immediate cancellation of PPAs under negotiation.

More to follow....