Kenyan households are set for tough times as electricity bills are expected to rise in the March 2021 review.
This comes after the sudden hike in fuel prices with super petrol, diesel, and kerosene increasing by Kshs.7.63, Kshs.5.75, and Kshs.5.41 per litre respectively.
With the new rates, electricity consumers will pay Ksh1.20 more per unit to Kenya Power which will translate to over Ksh1 Billion for the utility company.
The jump is the highest in nearly two years. The increase is attributed to the increase in payouts to the expensive diesel power plants with the fuel levy increasing in the review.
The fuel surcharge increased Ksh3.54 per kilowatt from Ksh2.61 in February 2021 which is the highest in 19 months.
Additionally, the foreign exchange fluctuation increased slightly to Ksh0.77 per KWh, compared to Ksh0.66 previously.
The Energy and Petroleum Regulatory Authority (EPRA) further attributed the increase of electricity prices to the increased use of thermal-powered plants.
Earlier in March, Kenya Power disclosed that it was looking at reducing the standing charges it pays to power producers with the aim of passing on the benefit to the end consumers as it also targets to boost its profits.
The company's management argued that if the cost of electricity from independent generators were to reduce, then, it would be easier for the utility firm to also reduce the cost of power to customers.
In a gazette notice on March 12, the Cabinet Secretary for Energy Charles Keter appointed a Standing Committee on the review and re-negotiate of Power Purchase Agreements (PPAs) to seek cheaper power options.
The 13-member team will among duties be tasked to review the terms of the operational and committed PPAs, issued Government of Kenya Letters of Support, and associated Project Agreements to identify parameters or issues for negotiation with the objective to optimize power purchase costs.
The committee will also develop a suitable strategy to engage the power generators in renegotiations for sustainable solutions for the energy sector and economy.
