The clamour by Kenya Power to have users pay for electricity bills in the US dollars on Wednesday, March 1, faced resistance from the Energy and Petroleum Regulatory Authority (EPRA).
EPRA stated that such a move may lead to unspecified consequences, especially on the economic status of Kenyan electricity consumers.
Daniel Kiptoo, EPRA's Director General claimed that should the plan succeed, Kenya Power will be compensated twice for exchange rate losses.
“You can’t have your cake and eat it, that is collect in dollars and have the forex adjustments as well. It has to be one,” stated Kiptoo.
The authority also asserted that Kenya Power is fully compensated for foreign exchange losses in current bills, and therefore, the question of US dollars does not arise.
The power firm is pushing for the payment of electricity in hard currencies in order to shield it from foreign exchange losses for expenses such as loan repayments.
KPLC argued that dollar-denominated repayment of loans has significantly contributed to the depreciating Kenyan Shilling.
However, EPRA advised Kenya Power to explore other options which are more effective and solution-oriented other than asking consumers to pay bills in US dollars.
“The proposal is their request to solve a greater macro problem, which may not be necessary if the interventions planned by government work," Kiptoo explained.
In the current arrangements, the foreign exchange fluctuation adjustment rise to Ksh1.85 per kilowatt hour (kWh) in February electricity bills.
The current fluctuation adjustment of Ksh1.85 per kilowatt hour is higher than Ksh0.73 which was reviewed in August 2022.
Kenyan Shilling has rapidly depreciated against the US dollar with the current exchange rate standing at Ksh127 against US Dollar.
