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Power bills to go up as forex cost adjusted

Electricity consumers are set for tough times ahead after the Energy Regulatory Commission increased the foreign exchange adjustment cost for meter readings taken this month.

In a notice published on Friday, the regulator directed that Sh0.41 be charged per unit of electricity consumed this month, up from Sh0.29 applied last month.

The energy regulator also slashed fuel cost surcharge slightly to Sh2.51 per unit of electricity down from last month’s Sh2.53.

The rate of reduction of the fuel cost charge has slowed down recently, compared to the previous months starting August when it was the highest at Sh7.22.

The regulator expects the surcharge to remain around the current rate following absorption of 280 megawatts of geothermal energy that has in the past months accounted for the significant reduction.

FUEL COST

“Unless there is additional generation from other resources that will reduce reliance on diesel generation, we see the cost being stuck around this band in the short-term,” said the watchdog’s director-general Joseph Ng’ang’a.

Past cut in the fuel cost charge has also been attributed to falling global oil prices that have led to a relief at the pump.

Fuel cost charge and the foreign exchange adjustment cost are variable components of the power bill that are adjusted every month.

The trends in the two costs, among other variable components, dictate the amount that consumers pay for their power usage.

Apart from the two variable costs, computation of the monthly bill also takes into consideration other levies and fixed charges including the tariff.