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President Uhuru Kenyatta switches on electricity at Mr. Lelei's home in Kapkatembo during the launch of last mile connectivity project in Nandi County. Also present is Cabinet Secretary for Energy and Petroleum, Charles Keter. PHOTO: FILE
Kenyans should brace for another round of power price hikes following the weakening of the shilling against the US dollar which has seen a rise in foreign exchange levy component of the monthly electricity bill.
In its latest review of some cost components that make up the monthly bills, the Energy Regulatory Commission (ERC) increased the foreign exchange levy to Sh1.28 per unit of electricity for power consumed in February. This is a steep rise from 84 cents per unit charged for electricity consumed in January.
The forex adjustment, which goes up or down depending on the performance of the shilling against other currencies, is meant to cushion electricity industry players from a weak shilling especially when making repayments for loans denominated in foreign currency, mostly the US dollar.
The shilling has in recent weeks taken a beating, trading on average at Sh103.9 against the dollar for the better part of January and at some point touching a high of Sh104. Yesterday, the Shilling was trading at Sh103.6.
The Fuel Cost Charge, however, declined marginally to Sh2.85 per kilowatt hour in February from Sh2.93 in January. The charge, which is a pass through cost that Kenya Power collects on behalf of thermal power generators, has been on the rise recently following the switching on of diesel fired plants due to a prolonged dry spell.