Power bills to go up for Kenyans again as ERC reviews inflation charge

A Kenya Power worker inspects a power line. [Photo: Courtesy]

The amount of money set aside to help power industry players cope with inflation has hit a new record high, resulting in higher power bills.

The Energy Regulatory Commission (ERC) in a notice on Friday revised upwards the component of the electricity bill, which is captured as inflation adjustment (IA). Consumers will for the first half of this year pay 42 cents as inflation adjustment for every unit of electricity used, which is seven per cent more than they paid between July and December last year.

ERC revises inflation adjustment every six months, which is aimed at cushioning power players from inflation. It goes up and down depending on the prevailing cost of goods and services.

Historical high

This component of the power bill has generally been on an upward trend over the past decade, occasionally dipping but currently stands at a historical high. Conversely, overall inflation in the country eased over the second half of 2017. The latest Kenya National Bureau of Statistics data show inflation stood at 4.5 per cent in December, down from eight per cent in August. It is the lowest rate since mid-2013. ERC also revised upwards the foreign exchange rate fluctuation adjustment to Sh1.40 per unit for power that will be consumed in January, up from Sh1.16 in December.

The component usually absorbs shocks that may be experienced by power industry players when the shilling weakens against major global currencies.