26 January 2013

Kenya: Weak Shilling Holds Back Reprieve On Power Bills

Kenya Power has increased the foreign exchange rate fluctuation adjustment for January to Sh1.59 per kilowatt-hour from December's Sh1.35, signalling hard times ahead for consumers as the shilling weakens.

The increase will claw back reprieve on the fuel cost charge, which has been reduced to Sh4.93 per kWh from last month's Sh5.35 per kWh. Inflation adjustment charge has been pegged at 30 cents per kWh for the next six months to end of June.

The listed electricity vendor published the new charges in the Kenya Gazette on Friday. The shilling has been on free-fall in the past few weeks against major world currencies, and is seen touching and surpass the 88 mark to dollar soon with March 4 elections in view.

The Central Bank posted the shilling as trading at a mean of 87.52 to the dollar at 1000hrs yesterday. The forex component of the power bill is related to foreign currency-based expenditures, such as electricity project loans repayments, incurred by the electricity sub-sector for generation and distribution. It is adjusted every month.

The fuel cost charge is also calculated every month, based on the quantity of fuel used to generate thermal power and the price at the time it was supplied to the generators. KPLC collects the money and passes it on directly to electricity generating companies to pay for supplies.

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