Industry cheers decision to reject proposal to hike power tariff

By Macharia Kamau

Nairobi,Kenya:Private sector is blowing trumpets in jubilation over the decision by the Government to stop Kenya Power (KP) from increasing energy tariffs. 
“The move comes as a relief to industry which has been in the forefront in lobbying for a reduction in energy cost in an effort to improve the global competitiveness of local goods.” Reckons Ms Betty Maina, Kenya Association of Manufacturers (KAM) Chief Executive.
In a memorandum to Energy Regulatory Commission (ERC) issued in the month of February 2013, KAM had demanded that KP works on its internal inefficiencies instead of resorting to tariff hikes.  The decision to reject the tariff review seeking a 200 per cent rate hike saw shares in Kenya Electricity Generating Company (KenGen) and distributor Kenya Power fall on Thursday.
Lower pricing
KP shares trade four per cent lower at Sh18 after falling 6.6 per cent to a near two week low of Sh17.50. KenGen shares trade five per cent lower at Sh14.30 after touching a six-week low of Sh14.
KAM says KP has not demonstrated keenness to improve on the internal inefficiencies. “For example, customer to staff ratio moved from 205 in 2010 to 199 in 2012 with administration and operational costs taking up 55 per cent of their revenues,” said Maina.
President Uhuru Kenyatta promised to implement reforms that will support business and improve the cost of doing business.  “The power utility should consider rolling out a massive campaign to encourage energy efficiency initiatives to ensure efficient use of available capacity as other alternative sources are explored,” explained Maina.
KAM has been carrying out energy audits for firms in the country with the support of the Ministry of Energy.