Kenya Power in fresh bid for electricity tariff review
Kenya Power Company employees carry out repairs to a transformer on Haile Selassie Road Mombasa in this photo taken on December 5, 2020.
Kenya Power has revived its bid for a review of electricity prices months after power charges were slashed by 15 per cent, dealing a heavy blow to its finances.
The utility firm will submit a new tariff application to the Energy and Petroleum Regulatory Authority (Epra) between October and December, even as the firm sought to climb out of a financial hole created by the power price cut in January.
“We’re looking forward to submitting a new application in the second quarter of this financial year,” a source in Kenya Power confirmed.
Epra has already made provision for Kenya Power’s new application. It has set aside funds for a conference to discuss the tariff review request. Official documents the Nation saw show that Epra has budgeted Sh495,000 for the meeting that will form part of stakeholder engagement on the matter.
The Energy Act 2019 provides that power tariffs be reviewed every three years although this hasn’t been respected due to the fact that Epra has often delayed or amended the rates to ease inflation pressure on households.
The last comprehensive review of electricity prices was in 2019.
Last January, however, Epra cut the energy charge—the largest component of the power bill that caters for the actual electricity used—by 15 per cent following a directive by President Kenyatta as he sought to address high power costs.
The three-year price review is crucial for firms along the country’s power supply chain and involves forecasting electricity demand, the costs associated with generating, transmitting, and distributing electricity, and the revenue needed by sector players to sustain their operations.
The fresh application will come in the wake of a projected Sh26 billion revenue cut for Kenya Power following the January price reduction.
In 2019, Kenya Power submitted a plan seeking to increase electricity prices by 20 per cent, which would have led to a sharp increase in power costs.
Kenya Power had sought to increase the consumption charge for usage of less than 100 kilowatts per month to Sh12.50 a unit, up from Sh10.
The charge for consuming above 100 units was to rise to Sh19.53 a unit from the current Sh15.80.
However, the utility firm formally withdrew the tariff last year amid sustained pressure by the government for cheaper electricity prices.
Kenya Power has constantly lamented the delays in approving electricity price increases to enable it to collect enough revenue for its operations.
