Kenya Power blamed President William Ruto's administration for losses it is incurring stating that it will lose up to Ksh6.5 billion because of the extension of 15 per cent end users’ electricity tariff cuts to April 2023.
According to the power company, the tariff cuts which were supposed to end in December 2022, were also partly to blame for the Ksh1.1 billion loss it made in 2022.
Moreover, the Kenya Power and Lighting Company (KPLC) added that out of a sum of Ksh14 billion that was supposed to be reimbursed to the company, the government had only released Ksh7 billion.
"We estimate that the extension of the lower tariffs for the months of January to April 1 will cost about Ksh6.5 billion if you use the parameters that were used when putting the 15% reduction in place in January last year," Kenya Power stated in a statement.
The extended tariff cuts are expected to end when new increased power tariffs approved by the Energy and Petroleum Regulatory Authority (EPRA) are scheduled to take effect.
“As a result of the tariff reduction, the basic electricity revenue for the six months decreased by Ksh6,696 million,” stated Kenya Power.
Kenya Power additionally attributed its reduction in earnings to increased foreign exchange losses.
Moreover, KPLC stated that the weak shilling increased the costs of repaying debts as well as payment of power supplies from power producers.
“This caused our operational costs to increase to Ksh21.72 billion from Ksh19 billion in the six months,” the power company explained.
The end users’ electricity tariff cuts were put in place in January 2022, to cushion Kenyans from the high cost of living
A further 15 percent cut was targeted through the renegotiation of power purchase agreements with independent power producers but it did not materialise after power producers rejected the plan.
Earlier on January 25, Kenya power proposed doubling electricity charges for users consuming over 30 units monthly to enable them to generate more revenue as it relied on increased sales.
“To fulfill this broad mandate, Kenya Power Company requires a just and reasonable electricity retail tariff that allows it to maintain its financial integrity, attract capital, operate efficiently, and compensate investors for risks assumed,” a statement from Kenya power read in part.
