Households hit hardest as electricity prices to go up from next month

Kenya power technicians install a transformer at Íbutúka Village in Mbeere North in Embu County. [Muriíthi Múgo, Standard]

Electricity prices are set to go up for all consumer categories starting April 1 which is set to hit many households already grappling with a high cost of essential commodities.

This is even as the authorities reduced the threshold for the subsidised consumer band – referred to as the lifeline tariff  – to cater to consumers only using 30 units of electricity (or kilowatt-hours – kWh) per month, locking out millions from the category.

In the new tariff announced yesterday by the Energy And Petroleum Regulatory Authority (Epra) consumers under the lifeline band will pay a basic energy charge of Sh12.20 per unit of electricity that they buy beginning next month. The basic energy charge is the cost of power before taxes, levies and pass-through costs such as the fuel, forex, and inflation costs are loaded.

This will be a 58 per cent increase from the current tariff of Sh7.70 per unit that was introduced at the beginning of last year following the Presidential directive to bring down the cost of power by 15 per cent. It is also a 22 per cent hike when compared to the basic energy charge under the 2018 tariff, the last time that Epra undertook a tariff review, which it considered as the base tariff when undertaking the review this year.

At the same time, Epra introduced another tariff for households – Ordinary Domestic Consumer One – which will cover households consuming between 31 and 100 units. These consumers will pay a basic energy charge of Sh16.30 per unit. They were previously covered by the domestic lifeline tariff and paying Sh10 per unit under the 2018 tariff and Sh7.70 per unit under the 15 per cent reduced tariff.

Ordinary Domestic Consumer Two (DC2) category, which will cover families consuming over 100 units of power per month will pay an energy charge of Sh20.95.  This is an increase of 66 per cent when compared to last year’s discounted tariff which was discounted at 15 per cent with consumers paying Sh12.6 per unit. It is 32.5 per cent higher that the 2018 tariff where the energy charge was set at Sh15.80.

The energy industry regulator has also categorized micro and small businesses into Small Commercial Lifeline, SC1, and SC2 with the tariff charges mirroring the domestic consumer categories.

Epra Director General Daniel Kiptoo said that while the base charge had gone up, the regulator had rebased fuel and foreign exchange cost adjustment, which had the effect of lowering the overall power cost (after the inclusion of the taxes, levies and pass throughs) for subsidised domestic and small commercial users.

“Overall there is a four per cent reduction for the most vulnerable in the society but for the energy charge rate, there is an increase from Sh10 in 2018 to Sh12 in the new tariff. Overall, however, there is a reduction in the all-in cost of power, which includes the taxes, levies and pass-throughs,” he said.

The reduction, Epra explained, follows the rebasing of the Fuel Cost Charge, which would see the pass-through would go down to Sh3.30 per unit in April from Sh8.30 per unit in March. It also follows the decommissioning of two thermal power plants, which Epra noted could result in lower fuel costs as their place was being taken up by plants using renewable sources to generate power.

The increase in power costs are also seen across commercial consumers when the Commercial Industrial One (CI1) will pay an energy charge of Sh14.70 per unit up from Sh12. At the same time, Commercial Industrial Five (CI5) category will pay a basic energy charge of Sh12.12 per unit from Sh10.10 under the 2018 tariff.

The industries are categorized from CI1 to CI5, depending on their usage with the very heavy power users paying relatively lower charges. The CI5 category covers very large manufacturers.

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