16 April 2010

Kenya: How Your Electricity Bill is Calculated

Nairobi — Kenya Power and Lighting Company managing director Joseph Njoroge says his company bills consumers as per the number of units consumed, and the existing tariff is set by Energy Regulatory Commission.

Mr Njoroge tabulated and explained the components of the bill that the company sends to customers. The bill usually has a balance brought forward, which is the previous bill balance whose payment is reflected if it has been settled.

Other KPLC charges include the fixed charge, which Mr Njoroge says goes towards expenses like installation and maintenance of poles, power lines and equipment as well as a 24-hour customer care.

Then there is consumption, which is the actual electricity used within the billing period. One unit is usually equivalent to one kilowatt hour. A kilowatt hour is equal to 1,000 watts of power used for one hour.

According to Mr Njoroge, KPLC uses part of this money to procure bulk power from electricity generating companies, which it retails to its customers. "That is almost about all my company benefits from delivering power to your house," he says.

"The rest are government and third party taxes." The money is collected by KPLC and all of it is passed on directly to electricity generating companies.

He relates fuel charge, for instance, to international fuel prices as well as the quantity of oil used for generation of thermal power while forex adjustment consists of the foreign exchange component and is related to the fluctuation of hard currencies against the Kenya shilling for expenditure related to the power sector.

An example he gives is project loan repayments. The other tax component of the bill is the ERC levy, which is passed on to the Energy Regulatory Commission and is three cents per kilowatt hour used.

There is the rural electrification programme levy, usually five per cent of the cost of the units consumed, which is passed on to the Rural Electrification Authority for implementation of rural electrification projects. Never mind that the government has to get its rightful share of the value added tax of 16 per cent of the total bill.

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