31 October 2018

Kenya: Relief for Households as ERC Reduces Power Tariffs

Photo: David Tumusiime/Daily Monitor
(file photo).

Households consuming a maximum of 100 kilowatt-hour (kWh) will pay reduced charges of Sh10 per unit as the energy sector regulator on Wednesday increased the lifeline (subsidy) threshold to 100 units, from the 10 units announced in July.

This, however, does not include variable pass-through charges such as 16 per cent valued added tax (VAT), fuel cost charge, forex charge and inflation.

UHURU DIRECTIVE

The review, which takes effect Thursday (November 1), will also see small businesses consuming up to 100 units pay a reduced charge of Sh10 per unit from Sh15.60.

The amended tariff structure follows President Uhuru Kenyatta's directive to the Energy Regulatory Commission (ERC) on October 16 to lower power tariffs for dominant small and medium-sized enterprises (SMEs).

“The commission has also put into consideration the views of the public on power bills post July 2018,” ERC director-general Pavel Oimeke said at a news conference, adding that further views came from legislators.

In the electricity tariff structure, only households using up less than 10kWh had been granted a discounted charge of Sh12 per unit, with those consuming higher electricity levied Sh15.80 per kWh.

The new structure will see homes incur a bill of Sh1,517 in November, 31.63 per cent less than Sh2,219 in October if VAT and adjustable costs were to remain constant.

“The lifeline tariff is meant to accommodate more households in informal settlements, urban, peri-urban and rural areas to cushion them from increased of living. This will cover 5.7 million customers,” Mr Oimeke said.

SHUTDOWN

Following the announcement, Kenya Power will shut down its prepaid electricity token generation system for 14 hours starting midnight Wednesday.

This will allow adjustment to the new tariffs announced by the energy regulator.

Customers will not be able to buy tokens until Thursday 2pm, the utility firm said, advising them to pay for their power consumption units before then.

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