By Morris Aron and Fatma Mohammed

The rains that have been blamed for power rationing and high electricity costs are here but power bills continue rising.

Kenyans were shocked after Kenya Power and Lighting Company (KPLC) raised the fuel cost segment of its billing signalling that electricity consumers are unlikely to get relief from the high electricity costs.

KPLC had informed power consumers, through a Kenya Gazette notice in October that from last month the fuel cost surcharge will be Sh7.75 per unit of power up from Sh7.43 on October’s power bill.

This component of the bill has risen from Sh4.10 in March, spiralling inflation combined with the high food costs eroding the level of disposable income of many a household whose salaries have remained almost stagnant.

But with the onset of rains many had anticipated power bills would drop as the country cuts back on thermal power and reverted to less expensive hydropower.

"November electricity bills are within average, save for the fuel consumption adjustment which went up," said Mr Kevin Sang KPLC corporate communications officer responding to a query from a consumer in a local daily.

"Fuel cost adjustment is collected by KPLC for thermal power generators including KenGen who supplement hydropower."

A steep drop in hydro power contribution to the national grid in the last couple of months due to drought has seen electricity bills rise by a margin of 60 per cent since March on the back of rising fuel costs charges — a varying item on the bills that is linked to the amount of power on the national grid that is generated from thermal sources.

And this trend is not about to abate anytime soon.

According to KenGen Managing Director Eddy Njoroge rains have not been sufficient to cut down power generated from thermal sources.

The trend means that electricity consumers are likely to continue bearing the high cost of electricity for at least another month as the country waits for rains to fill up dams.

Energy Regulatory Commission (ERC) says hydropower dams will be replenished in December at the earliest should the rains persist at the current rate.

When that happens, power generators are expected to switch to hydropower generation in the process leading to a decline in the portion of thermal power in the national grid.

There is however a catch. Rising crude oil prices are expected to erode any potential pricing gains that consumers may stand to benefit in the next couple of months.

Statistics indicate that crude prices have averaged around the one-year high of $79 a barrel that was recorded in October from an average of below $70 last month mainly driven by prospects of economic recovery.

International investment analysts are forecasting that crude prices will continue to rally hinting at possible continued rise in the cost of fueling thermal power generators.

The high cost of electricity will continue to affect more than one million consumers, most of whom are already reeling from the high cost of food, water and transport that are daily expenses.

Apart from the domestic front, high power costs lead to high production costs, as energy is one of the main components in any manufacturing process.

Such a trend, many manufacturers say is bound to push up the cost of essential commodities as manufacturers pass the additional costs to the consumer.

"Manufacturers have no option but to pass the high input costs to end consumers in order to remain afloat," said Mr Vimal Shah the chief executive of Bidco and chair of the Kenya Association of Manufacturers at a recent the Prime Minister’s roundtable discussions that brings together investors and business stakeholders.

And even as Kenya National Bureau of Statistics report dropping inflation trends many remain skeptical with the figures especially with the introduction of the new way of calculating inflation.

Central Bank of Kenya (CBK) has warned that the cost of living is set to rise further in the remaining part of the year, fuelled by rising water and energy prices.

"Inflation is likely to rise as a result of the rising fuel costs as diesel is used to generate thermal energy," said CBK in their latest update on the economy.

But with the electricity costs on a rising spree, energy economists are forecasting that it might not be a surprise if the fuel charge component of electricity hits Sh8 mark by January, if the rains prediction fail to meet targets leading to increased use of thermal power to meet demand.

British private power supplier Aggreko is injecting more thermal power into the nationalgrid following a contract between KenGen and Aggreko to provide an additional 140 megawatts of emergency power.

In September, KPLC bought 521 million kilowatts hour (Kwh) of electricity with thermal contributing 278 million Kwh — meaning that thermal power accounted for 53 per cent of total amount of electricity that KPLC bought from KenGen and Independent Power Producers.

Normally, thermal power accounts for 16 per cent of the country’s total power generation with hydro sources providing more than a third of the remainder.

According to Energy minister Kiraitu Murungi, the problem is as a result of the drought that was experienced for the better part of the year.

"A deepening of the drought has halved the contribution of hydro. Emergency power is up hence high power bills," said Mr Murungi.

Drought leading to low levels of water at hydro sources saw the closure of Masinga dam for sometime leading to half or full day power rationing in the last couple of months.

High power costs are now being seen as one of the key impediments of economic growth after drought led to a sharp decline in agricultural output.

Kenya has an installed power capacity of 1,480MW , including temporary emergency

power of 290MW, but is currently supplying about 1,050MWat peak time.

Hope now lies in plans to initialise a programme, where petroleum will be mixed with alcohol beginning April next year according to a Kenya Gazette notice by the ministry of energy.

—maron@standardmedia.co.ke