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Kenya Power pushes for 20% electricity bill hike


Kenya Power has made an application to increase electricity prices by up to a fifth in a review that if implemented will hurt household budgets and raise the already high cost of doing business in Kenya.

The listed utility firm has sought approval from the Energy and Petroleum Regulatory Authority (EPRA) — the electricity sector regulator — for the raising of tariffs to reverse its reducing profitability and review the temporary reduction of power charges that expired in July.

Kenya Power wants to increase the consumption charge for those consuming less than 100 kilowatts per month to Sh12.50 a unit, up from the current Sh10.

This will see the bills of homes consuming 50 units monthly increase to Sh961 from the current Sh816, representing a 17.8 percent jump when other charges like taxes, inflation and fuel and forex levies are incorporated.

Households consuming 200 units will get a bill of Sh5,477 from the current Sh4,612, reflecting a 18.8 percent rise, given their consumption charge will rise to Sh19.53 per unit from the current Sh15.80 in the event that the regulator approves the proposed tariff.
Yesterday, EPRA softened its earlier stand to reject plans to raise the tariffs and said it was reviewing Kenya Power’s application.

“The tariff application is still under review by EPRA and stakeholder consultations will be held before any determination is made,” EPRA Director-General Pavel Oimeke told the Business Daily in an interview.

DERAIL KENYA

If approved, the new prices are likely to derail Kenya’s quest to make energy costs competitive compared with other African nations like Ethiopia, South Africa and Egypt. The cost of power is a key determinant of new investments. An increase will hit household budgets hard given that electricity prices are among expenses whose costs have jumped the most under the Jubilee administration, in government since 2013.

Households consuming 50 kilowatt hours (kWh) paid Sh816 last month compared to Sh556 in May 2013, reflecting a 47 percent increase despite billions of shillings of investments in cheaper renewable sources of power like wind, solar and geothermal.

Last year, EPRA reduced the retail prices of electricity after an order from President Uhuru Kenyatta in the wake of widespread complaints from domestic customers and small businesses over a costly tariff introduced last July. The tariff almost doubled the monthly bills for higher income households, trigg

This story was first published in the Business Daily. Read the full story here.