22 December 2012

Kenya: Electricity Users to Pay More for Less

Electricity consumers will pay Sh6.70 more for every kilowatt-hour used in December, spelling harsh holidays ahead. Listed vendor Kenya Power and Lighting Company has adjusted upward the fuel cost charge and foreign exchange rate fluctuation components of power bills.

Through a legal notice published on Friday in the Kenya Gazette, the fuel cost charge has been pushed up by Sh5.35 per kWh and Sh1.35 per kWh for foreign exchange rate fluctuation for December metre readings.

Those with pre-paid metres are already feeling the pinch as units purchased in advance are lasting for far shorter duration than usual. Post-paid metre users will feel weight of the adjustment when December bills are delivered in January.

Fuel cost charge is a variable surcharge per kWh that Kenya Power publishes monthly, apparently reflective of the cost of thermal-generated electricity in a period.

Forex rate fluctuation adjustment component of the electricity bill reflects foreign currency costs incurred by KenGen and Kenya Power, and is dependent on the shilling's strength against major world currencies.

With these adjustments, consumers will cough up at least an extra Sh4.5 billion in December electricity costs going by an average figure of 672 million kilowatt-hours generated and consumed in October.

Kenya Power charges Sh2 per unit for up to 50 units consumed, Sh8.10 per unit for 51-1,500 units and Sh18.57 per unit for 1,501 units and above.

Power bills have a fixed monthly charge of Sh120, which has the potential of rising to Sh240 "if method DC is used in conjunction with method IT at the same supply terminals," according to the power vendor.

The fixed charge and surcharges - such as energy charge and demand charge - are graduated upward for non-domestic small commercial consumers, and commercial and industrial consumers depending on units billing.

The shilling exchanged at a mean of 86 and 139.70 against the dollar and the sterling pound respectively on Friday. It has deteriorated by 2.4 per cent against the dollar since second quarter of when it exchanged at a mean of 84.

The Kenyan currency is expected to touch the lows of 87/88 against the dollar next week or early January 2013 as election-related spending gains momentum.

This means electricity consumers are unlikely to have a reprieve in the foreseeable future until after elections. Kenya Power has in recent months plugged into expensive emergency and thermal (diesel-generated) power in parts of the country as main supplier KenGen failed to meet adequate capacity.

When releasing monthly maximum retail pump prices last week, the Energy Regulatory Commission said landed cost of imported diesel decreased by one per cent from $1,018 per tonne in October to $1,008 per tonne in November.

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