22 February 2013

Kenya: Consumers, Manufacturers Oppose Planned Power Cost Hikes

Consumers and local manufacturers are opposed to a planned increase in electricity prices proposed by Kenya Power.

The increase if approved by the Electricity Regulatory Board will see domestic and commercial consumers pay more . As a result the price of locally manufactured goods is likely to go up.

The lowest band domestic consumers who are currently charged Sh2 per kWh will see this go up to Sh5.10, a 155 per cent price increase.

The power distributor also wants to increase the monthly fixed charge for domestic consumers from Sh120 to Sh200 , a 67 per cent increment and continue gradually until it reaches Sh300 in 2016.

"We do appreciate that Kenya Power will need additional resources to meet the rising consumer demand, but certainly not beyond 10 per cent of the current cost. What is totally unacceptable is the proposal to raise the fixed charge from Sh120," read a statement from Consumer Federation of Kenya.

The manufacturing sector, which will be hard hit if the tariffs are approved indicated they will oppose the move."Nobody likes high high power prices.We obviously do not want any increases, but will have to review what justifications they are giving first," Kenya Association of Manufacturers Chef executive Betty Maina said yesterday on the phone.

The smallest commercial setting are set to pay 50 per cent more per units used from Sh8.96 per kWh to sh13.66.On average, the bigger industries will pay 60-70 per cent more for consumption every month. By 2016 the companies will be paying over 80 per cent what they are paying now.

With power accounting for big part of industries' costs, this could see inflation rise again.Kenya Power wants to raise money to increase capacity from the current 1248MW to 1672 MW and improve on transmission, distribution and maintenance.

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