Kenya Power recorded a significant Sh1.3 billion revenue growth in April, partly boosted by the newly raised electricity tariffs.
The upturn in revenue underlines the gains of the long-delayed tariff adjustments on the company's bottom line. The company's application for tariff raises was put on hold for two years until March.
"Overall the revenues were up approximately Sh1.3 billion although there are several dynamics to this not just the tariff," said Kenya Power finance manager Stephen Vikiru.
The Energy and Petroleum Regulatory Authority (Epra) in March gazetted new power tariffs that took effect on April 1, boosting Kenya Power and other power sector entities.
Kenya Power's electricity revenue went up by 9.1 per cent to Sh157.35 billion in the financial year to June 2022, up from Sh144.11 billion in the previous year driven by increased sales.
The newly approved tariffs will see the utility's revenues increase to Sh177 billion in the current 2022/23 financial year — some Sh18 billion lower than the Sh195 billion the firm had targeted in its initial application to Epra.
"The tariffs will safeguard the financial sustainability of the sector by ensuring Kenya Power meets its power purchase and financial obligations. It will also ensure improved service delivery by scaling up refurbishment and upgrade of transmission and distribution system," said the regulator.
The new tariffs mean that April, May and June are on course to record the highest revenues in the current financial year in a timely boost to the firm that booked a loss in the first half of the fiscal year.
Kenya Power sunk into a Sh1.14 billion net loss for the six months to December 2022 owing to the 15 per cent power tariffs cut that was effected in January last year to lower the cost of electricity.
The power prices cut – coupled with a weak shilling that significantly increased the utility's costs – forced the firm back into losses just a year after the firm earned a net profit of Sh3.81 billion in the half-year to December 2021.
The company had sunk into a net loss of Sh2.98 billion in the full financial year that ended in June 2020, which was its first net loss in 17 years but had since fought its way back into profitability.
In what was the first review of power tariffs since 2018, Epra raised base power prices to Sh12.22 per unit from Sh10 for those consuming below 30 units, a 22.2 per cent jump.
The Epra also raised base prices for customers using between 30-100 units from Sh10 to Sh16.3 while those consuming more than 100 units now pay Sh20.97 per unit, up from Sh15.8.
