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Manufacturers biggest gainers in latest electricity tariff review

Large power consumers categorised as Commercial Industrial One got a reduction of 17.55 per cent. [Courtesy]

Large electricity consumers, mostly industries, got the biggest reduction in the cost of power in the partial tariff review undertaken by the energy regulator in January this year.

The Energy and Petroleum Regulatory Authority (Epra) in a January 2021 tariff review cut power prices in line with last year's directive by President Uhuru Kenyatta.

The reduction was expected to see consumers get a 15 per cent drop in the cost of power by January this year while another 15 per cent in March, bringing the total drop in power bills to 30 per cent.

 

Some of the biggest consumers however got a reduction of as much as 17.55 per cent, according to data by the energy sector regulator.

Consumers under the domestic lifeline category who use up 100 units of power (kilowatt hour or kWh) per month, saw a reduction of 15.73 per cent, with the per-unit cost, dropped to Sh15.94 from Sh18.91.

This category of consumers are subsidised and account for 60 per cent of Kenya Power customers according to Epra.

Other domestic consumers using upwards of 100 units per month saw a 15.67 per cent decline to Sh21.87 per unit of power last month, after the tariff review from Sh25.93 per unit.

Epra acting Director for Economic Regulation and Strategy John Mutua explained that all consumers got more than a 15 per cent reduction. “What you notice is that we got more than 15 per cent reduction (across the different consumer bands), basically about 15.7 per cent,” said Mutua.

Industries got a reduction of between 15.52 per cent and 17.55 per cent, depending on their respective tariff and consumption levels.

Large power consumers categorised as Commercial Industrial One got a reduction of 17.55 per cent, with the energy charge reducing to Sh19.66 per kWh from Sh23.85 earlier.

Firms falling under the Commercial Industrial Five, which is made up of a few but very heavy users got a 16.63 per cent reduction to Sh16.12 per unit from Sh19.34 per unit.

Industries got a reduction of between 15.52 per cent and 17.55 per cent. [Courtesy]

The consumer bands are designed such that the heavier the usage, the cheaper the power rates.

Following the tariff review, manufacturers then noted that this would play part in boosting local manufacturing.

They have in the past agitated for lowering of power costs, which they say has had a major hand in high cost of local products such that they cannot compete with imports.

They however did not indicate whether the benefits of reduced manufacturing costs would be passed on to consumers.

Other than the recent tariff reduction, there are other tariffs in place to incentivise commercial and industrial consumers, mostly manufacturers.

These include the time of use tariff, where industries get a 50 per cent discount on the energy charge for power consumed during off-peak hours between 10 pm and 6 am.

A manufacturer however has to surpass their monthly average consumption to benefit from the discount, a requirement that has made it difficult for many to benefit from the tariff.

Epra also has in place a tariff for firms looking at setting up at the planned Olkaria-Kedong Special Economic Zone in Naivasha.

The companies will pay a highly discounted rate of Sh5 per unit of power. Other than proximity to the Olkaria geothermal fields, which can reduce the cost of transmission and technical losses, the area is also in close proximity with Standard Gauge Railway’s station at Suswa.