EPRA Explains Why Charges in Token Purchase Keep Changing

An image of someone inserting tokens on their gadgets.
A photo of someone inserting KPLC tokens on their gadgets.

The Energy and Petroleum Regulatory Authority (EPRA), on Tuesday, March 21, explained that the fluctuating charges recorded during the purchase of tokens resulted from factors involved in generating electricity.

In its Biannual Energy and Petroleum Statistics Report, EPRA detailed that pass-through costs were imposed on electricity bills, with several charges changing monthly depending on the generation of power.

Charges imposed during the purchase of tokens - usually reflected on messages by Kenya Power - include Fuel Energy Cost (FEC), Foreign Exchange Rates Fluctuations Adjustments (FERFA), Water Resource Management Authority (WARMA) levy, and inflation adjustments.

According to the authority, FEC charges fluctuate due to the generation of power, poor hydrology, fluctuating wind output, and breakdowns of some geothermal power plants. 

The geothermal complex at Olkaria in Naivasha.
The geothermal complex at Olkaria in Naivasha.

"The FEC rate is computed monthly, and the applicable charge is set to mitigate against a sharp increase in electricity prices. In this regard, when the computed FEC is above the set cost, the charge to customers is maintained at the set cost.

"Any amount not recovered by the generating company is recovered in subsequent months during periods of improved hydrology when the FEC falls below the set cost," read the statement in part.

On the other hand, the WARMA Levy is calculated depending on the amount of electricity generated from hydropower plants.

"The highest FERFA levy was recorded at Ksh2.0718/kWh in December 2022. This is attributed to the fluctuations of the US Dollar against the Kenyan Shilling for expenses related to power generation.

"Actual inflation adjustment on end-user tariffs stood at Ksh0.47/kWh in the months of July and August and Ksh0.67/kWh for the months of October to December 2022," read the report in part.

EPRA explained that the costs were crucial in ensuring that Kenya Power maximised revenue collection as they aim to connect more homes with electricity.

According to the authority, the peak hours when Kenyans used electricity, the most were between 7:30 pm and 8:00 pm. 

However, the coastal region recorded a peak time between 8:00 pm and 8:30 pm.

File photo of EPRA Director General Daniel Kiptoo
File photo of EPRA Director General Daniel Kiptoo.