Power Costs Rise Slightly Following High Inflation

The energy regulator has marginally raised the cost of power for January on higher fuel costs following an adjustment to inflation ahead of a planned comprehensive review of electricity tariffs by the government within three months. 

The Energy and Petroleum Regulatory Authority (Epra) raised the inflation adjustment cost to 85 cents per kilowatt-hour (kWh) from 67 cents per unit due to high inflation. The component is adjusted every six months.

Annual inflation hit 9.06 percent in December last year driven by high costs of fuel, food, cooking gas and electricity.

Epra notes that KenGen incurred an extra cost of Sh753.99 million in the six months to December due to inflation, independent power producers (IPPs) incurred Sh1.14 billion and Kenya Power Sh2.27 billion during the period.

“Pursuant to Clause 3 of Part III of the Schedule of Tariffs 2018, notice is given that all prices for electrical energy specified in Part II of the said Schedule will be liable to an inflation adjustment of plus 85 cents per kWh for all meter readings taken in January—June 2023,” said Epra Director-General Daniel Kiptoo in a gazette notice on Friday.

This means consumers will get fewer units of electricity for the same amount of money compared to last month adding pressure on consumers who are heaving under the rising burden of the high cost of living.

For instance, a lifeline consumer who got 24.56 units for Sh500 will now get 24.43 units for the same amount of money.

This comes ahead of a planned review of electricity prices following the expiry of the subsidy on electricity that had helped keep power prices at a lower level last year.

Epra cut energy charge tariffs by 15 percent in January last year as part of a push by former President Uhuru Kenyatta to make electricity more affordable to consumers.

The cheaper tariffs lapsed on December 31, 2022, but the government has opted not to reinstate the higher tariffs pending a review of the tariffs.

President William Ruto last week said the government is working towards lowering electricity tariffs.

The government, said the Head of State, will prioritize low-income earners and manufacturers in the tariff review process.

“In three months, we will have public consultation to ensure that we have tariffs that are affordable to those at the bottom of the economic pyramid and our manufacturers,” said Dr Ruto.

Epra is currently reviewing a tariff review application submitted by Kenya Power for a review of electricity prices in October last year.