A Kenya Power technician working on a transmission line. FILE PHOTO | NMG Kenya Power has opened talks with the energy regulator to increase electricity prices by up to a fifth after the State softened its earlier stand against higher tariffs.
The listed utility firm said it was engaging the Energy and Petroleum Regulatory Authority (EPRA) — the electricity sector regulator — on the application it made last year seeking a revision of tariffs.
The Energy ministry is understood to have made a U-turn and is now in agreement that Kenya Power needs more cash to cover the cost of buying wholesale electricity from generators such as KenGen and maintenance of the national grid.
“We are in consultations with EPRA and will provide further information as soon as it is available,” Kenya Power managing director Bernard Ngugi told the Business Daily in an e-mail response.
If implemented, the higher tariffs will hurt household budgets and raise the already high cost of doing business in Kenya.
Kenya Power wants to increase the consumption charge for usage of less than 100 kilowatts per month to Sh12.50 a unit, up from the current Sh10.
The charge for consuming above 100 units will rise to Sh19.53 a unit from the current Sh15.80 in the event that the regulator approves the proposed tariffs.
Kenya Power holds that that the higher tariffs are justified because the present electricity prices lapsed last year.
In 2018, EPRA reduced the retail prices of electricity after an order from President Uhuru Kenyatta in the wake of widespread complaints from domestic customers and small businesses over a costly tariff introduced last July.
The tariff almost doubled the monthly bills for higher-income households, triggering complaints that forced EPRA to cut the tariff from November 2018 to July 2019 to Sh10 per kilowatt hour from Sh15.80 for customers who use below 100 kilowatts per month.
The expiry of the temporary tariffs is what is emboldening Kenya Power to push for a review of the tariffs upwards and try to reverse its falling earnings, which has seen it issue a profit warning this year — the third one in a row.The profit alert means the utility’s net earnings will decline by at least 25 percent of last year’s Sh262 million — which was the worst in 16 years.The law provides that electricity tariffs be reviewed every three years, but the timetable has been erratic as the regulator has often delayed or amended the […]
