Large energy consumers, KPLC in talks over rationing

Business

By John Njiraini

Large energy consumers could be hit by an increase in production costs as the effects of the power-rationing programme start to bite.

A week after the rationing started, it has now emerged that bulk consumers outside industrial areas are petitioning the Kenya Power and Lighting Company (KPLC) to exclude them from the programme.

They argue an increase in production costs would be passed on to consumers, who would be forced to pay more for products.

And while some are investing in their power generation facilities, they argue the projects cannot commence operations any time soon.

So far, a number of meetings between KPLC, KenGen and the Association of Large Electricity Consumers (AOLEC) have taken place to forestall the eventuality.

"We are in discussions with KPLC and KenGen to be excluded from the load shedding programme and we hope to reach an agreement that would guarantee minimum disruptions," said a member of AOLEC.

Reduced rate

The association has also tabled a proposal for a special time of use tariff that would make them switch to overnight consumption at reduced rate, but an agreement is yet to be reached.

Through the time of use tariff, the manufacturers argue they are prepared to carry out their productions at night if KPLC can grant them a discount to offset any additional costs they might incur like security.

KPLC Corporate Communications Manager Florence Obura confirmed the company had received the requests, but is yet to make a decision.

"Different consumers have been making special requests through our regional managers and we are looking at them," she said. According to AOLEC, large commercial and industrial electricity consumers account for 40 per cent of the total power consumed in the country. Bamburi Cement, the leading cement manufacturer and a major electricity consumer, uses power worth Sh2 billion annually.

As the effects of the rationing start to be felt, bulk consumers like cement manufacturers are investing in alternative sources to ensure their operations are not interrupted.

The company expects to save Sh468 million it spends annually on power bills when the plant is commissioned in 2011.

"Electricity expenses account for 30 per cent of our total operational costs," said ARM chairman Rick Ashley.

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