Kenyans are expected to pay more for electricity beginning October 2020 following a rise in foreign exchange rate of the shilling against the dollar.
A report by The Standard indicated that the foreign exchange adjustment component of the power bill doubled in one month between September and October, and was likely to raise the power prices to 2-year high.
The increase was brought about by Covid-19 pandemic as it weakened the shilling against the dollar.
The foreign exchange component rose to Ksh1.07 per unit in October from Ksh0.57 per unit or kilowatt hour (kWh) in September.
“Notice is given that all prices for electrical energy… will be liable to a foreign exchange fluctuation adjustment of plus 107.31 cents per kWh for all metre readings taken in October 2020,” noted the Energy and Petroleum Regulatory Authority (Epra) in a notice on Friday, October 9.
The publication further indicated that the rise in the exchange power component was geared to hit high levels experienced in July 2018 where it rose to Ksh1.22 per unit.
In February, power consumers in the country were treated to a negative rate that meant that for every token purchased, they would benefit from free units.
Since the pandemic hit in March, the component, which cushions power industry players from weak shilling, has been on the decline owing to the pandemic's effects on the economy.
In September, the shilling performed poorly against the dollar registering at Ksh108.6 as compared to Ksh106.44 in June. At the beginning of 2020, the shilling was valued at Ksh100.9 against the dollar.
Forex component is among the factors that affect the pricing of electricity in the country alongside fuel cost charge (FCC), inflation adjustment and tax among others.
In June, EPRA refuted reports of an increase in electricity prices over the same logic.
The Agency detailed that it had reviewed the base energy charge rates in July 2018 which were effective till June.
At the time, the agency had increased the fuel energy cost charge by Ksh2.40 per kWh (Kilowatts per hour).
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