Kenya Power’s discounted tariff raises Sh459 million

Climbing plants covering power transformers in Hurlingahm and State House road, Nairobi. [James Mwangi]

Kenya Power raised Sh459 million in revenue from the Time of Use (ToU) tariff introduced in 2017 as industrial power consumers took advantage of the discounted rates to save up on energy costs.

The State utility firm, however, says more industrial consumers ought to come on board to help reduce on-peak demand while assuring savings for both manufacturers and the utility provider.

“Introduction of ToU tariff has contributed to increase in the minimum daily off-peak demand to approximately 1,050 megawatts (MW) on a weekday from about 950MW in November 2017,” said Kenya Power General Manager in charge of street lighting Eng Peter Njenga last week. “This is expected to increase further as more consumers come on board.”

The ToU tariff was introduced in December 2017, allowing large power consumers a 50 per cent discount on power used in the off-peak hours between 10pm and 6am.

Under the tariff, large and industrial power users metered at between 450 volts and 11 kilovolts (kV) pay as low as Sh3.55 per unit of electricity consumed.

Ordinarily, this cadre of customers pay between Sh9.20 and Sh7.10 per unit, with heavier users paying lower charges.

“Additional electricity units sold from the implementation of the pilot phase of the ToU tariff totaled 91GWh, this generated Sh449 million in revenue for the company,” said the company in a statement. About 1,800 customers out of the eligible 3,120 customers under the industrial and commercial category benefitted from the discounted tariff in March 2019, recording savings amounting to Sh131 million.

The peak demand for power has been growing at an average of 5.1 per cent annually in the last five years, with a high of 8.8 per cent recorded last year.

Peak demand currently stands at 1,882MW.

“We are looking forward to supplying electricity to the upcoming industrial parks, special economic zones, and large irrigation schemes to grow demand,” said Eng Njenga who also called on manufacturers and SMEs to take advantage of the ToU tariffs.  The power firm said the tariff will help in boosting productivity and job creation.