In the new proposed tariffs, Kenya Power is seeking to increase power bills by an average 40 per cent.
This is in addition to other charges and levies which will push up costs by up to 78 per cent.
The proposed increase in electricity tariffs is based on required resources for the sector’s sustainability, Kenya Power now says, as public participation kicks off tomorrow.
The utility firm, which is seeking an upward adjustment on electricity tariffs yesterday, said it considered the entire value chain-from power generation, purchase, distribution to retail, which covers revenues required by all players.
This comes even as Kenya Power remains tied to expensive thermal power deals with Independent Power Producers (IPPs).
It is the third highest generation source after geothermal and hydro, accounting for 11 per cent of power generated for sale by producers.
In the new proposed tariffs, Kenya Power is seeking to increase power bills by an average 40 per cent.
This is in addition to Fuel Energy Cost, Foreign Exchange Rate Fluctuation Adjustment, inflation adjustment(varies annually or bi-annually), Water Levy (WARMA which varies monthly),Value Added Tax (currently at 16%), Rural Electrification Program (REP) Levy among other costs.
This could see the cost of electricity increase by up to 78 per cent, if the Energy and Petroleum Regulatory Authority (EPRA) approves the new tariffs from Kenya Power, expected to be effective from April 1.
In the proposal, Kenya Power has adjusted the consumption brackets, which will take more consumers to higher tariffs.
For instance, the zero to 100KWh hour bracket has been reduced to zero to 30Kwh, with a proposal the group pays Sh14 per unit, up from Sh10.
This means households that consumer 50 units per month, which is the lowest figure used in the inflation data by the Kenya National Bureau of Statistics, will spend Sh700 on power, up from Sh500.
Those consuming above 100Kwh will pay Sh21.68 per unit, up from Sh15.6, with additional charges and levies pushing up costs further.
Small commercial entities consuming up to 30Kwh will pay Sh14 up from Sh10 per unit.
Those using more than 100 units will pay Sh21.08 up from Sh15.6 per unit.
Together with other charges and levies, households consuming zero to 30 kwh will pay Sh23.1 up from Sh20.5 per unit, while above 30kwh per month will cost Sh31.6 up from Sh26.4 per unit.
Large consumers, mainly factories that have been paying Sh12 will pay Sh16.48 per unit, but can take advantage of cheaper power during the off-peak, where Kenya power has proposed they pay Sh8.24 per unit.
“We want to encourage them to manufacturer more during these period which is manly at night. That is how we can become a 24-hour economy,” Kenya Power acting managing director Geoffrey Muli said during a briefing in Nairobi yesterday.
The costs are however without levies and other charges, meaning the final bill which will be much higher.
According to Muli, costs in power generations have increased in recent years which informs the upward adjustment to ensure reliable and quality electricity, as the country chases the ambitious plan of universal connectivity by the year 2026.
The proposed adjustment however does come as a surprise since the law requires tariffs to be reviewed every three years, with the last review being in 2018.
Interventions by government to cushion households have however seen the review delayed, including in 2021, when the government extended a subsidy to consumers.
“We received the proposed tariffs applications from Kenya Power on October 31, 2022,” EPRA director general Daniel Kiptoo confirmed yesterday.
He said the regulator will commence engaging the public in Nakuru, Eldoret and Kisumu this week before heading back to Nairobi, then Garissa, Mombasa and the Mount Kenya region next week.
The regulator is expected to consider public input before making the final decision of either approving the proposed tariff, reducing or adjusting them further, which is however unlikely.
Cabinet and Parliament will then have their say before the tariffs are implemented.
An increase will however deal a blow to households who are battling run-away inflation mainly on high food prices, expensive imports as a result of a weak shilling to the dollar, and high fuel prices among others.
Expensive Power Purchase Agreements with IPPs have been blamed on the high cost of electricity in Kenya compared to her neighbours.
Efforts by the previous administration to renegotiate the PPAs however hit a snug as producers held on to their guns, riding on irreversible contract terms.
An internal audit report seen by the Star shows Kenya Power spends an average of almost 15 times more to buy power from IPPs, compared to that from KenGen, passing the high bill to consumers.
Owners of those IPPs are in most cases withheld, with some companies having political backing and shareholding of influential individuals from past regimes.
Consumers have been up in arms over high taxation which has seen them continue to receive fewer tokens.
The proposed tariff increase now leaves consumers at the mercy of EPRA, while rendering President William Ruto's promise of cheaper power a pipe dream.