By Macharia Kamau
KENYA: Electricity consumers have hope of lower costs. This is after the Government issued a directive blocking the hike in power tariffs.
The Energy Regulatory Commission (ERC) has also been stopped from revising upwards the monthly electricity charges.
Deputy President William Ruto on Thursday told Kenya Power to sort out its inefficiency and look for other means to shore up revenue. He noted that an increase in power prices would be an impossible burden for Kenyans already grappling with a high cost of living.
More charges
The directive means Kenya Power, that had gone to ERC seeking an approval to charge more for electricity, will have to go back to the drawing board to increase revenue.
“Kenya Power has to sort out any inefficiency in its operations…the Government will not accept any proposal to increase power tariffs…it is a burden to the country,” said Ruto.
“There is no justification for this (tariff increases). Tariff reviews cannot just be upwards…let us review it downwards... we as a Government are very clear that we are not going the direction of increasing prices.” The Deputy President said manufacturers and ordinary power users had suffered higher tariffs when Kenya Power and its affiliates could find cheaper ways of generating and distributing electricity.
“You have to work out a plan for enhancing an efficient, cheap and effective power supply to Kenyans. This must be done urgently,” he said.
He spoke yesterday when he met executives from government agencies manning the energy industry in his office. These included energy PS Patrick Nyoike, ERC Director-General Kaburu Mwirichia and Kenya Power Managing Director Mr Joseph Njoroge. Others at the meeting were Investment Secretary Esther Koimett and Kamau Thuge, senior economic advisor at Treasury.
Kenya Power had in February sent a proposal to ERC for an upward adjustment of electricity tariffs. The power firm had sought to raise the fixed charge and the consumption tariff by 21 per cent to cover for rising cost and boost sales. The proposed rates would have seen a new fixed rate of Sh300 for domestic consumers up from the current Sh120. ERC has to approve the increase in the fixed charge ad consumption tariff. The existing retail tariffs were approved by the ERC in June 2008 and implemented from July 1 2008.
Reasonable margin
ERC had in April said the increase was imminent but added it was working on a reasonable margin. “We had a public hearing on the proposal by Kenya Power in February 25 where we received a lot of comments from the stakeholders. We have been discussing and reviewing these comments and we have not yet finalised this process,” said Mwirichia in an April interview with The Standard. “We shall be finalising I think in the next one month thereafter we shall approve something though the numbers we don’t know yet because we shall also be considering other factors.”
Ruto further directed the energy ministry to speed up efforts to lower electricity costs. “We know what power does to the competitiveness of our products and we need to reduce the prices so that we can have a fair share of the market in the region and beyond,” said Ruto.
