Power tariffs in Kenya: There was a sigh of relief among power consumers yesterday following the scrapping of the fixed charge on electricity. This is because the cost of power was expected to fall, easing the cost of living among Kenyans.
But a keener look reveals that instead of the low costs, the majority of Kenyans will suffer the biggest pinch in the new phase of power tariffs.
According to a report published by the Standard newspaper, the Energy Regulatory Commission (ERC) has instead spared bulk consumers high power bills.
“The substantial power cost increase is despite the scrapping of the monthly fixed charges and reduction of the variable on the power bill such as the fuel cost charge and foreign exchange adjustments. In the new structure arrived at following a storm over inflated bills and a complicated billing structure, Kenya Power’s middle-class consumers will pay higher charges while their richer counterparts will enjoy substantial reductions on bills,” says the report.
While ERC said the very poor would see their bills come down, it has lowered the threshold to 10 Kilowatt-hours (units) per month, which can only benefit a consumer using a single power saving bulb and only for a few hours a day.
This could lock out a majority of power users. The regulator said 3.6 million consumers under 10 units would benefit from the lower tariff. Previously, the threshold – referred to as the lifeline tariff – was set at 50 units.
The Standard further reports that under the new structure, Kenyan households consuming 200 units per month will now pay Sh. 4,580 per month, an 11 per cent increase compared with Sh. 4,121 they would have paid under the current structure.
“Low income users consuming less than 10 units of electricity every month, on the other hand, will pay Sh. 186, down from the current Sh. 278, while a fairly well off household consuming 1,500 units in the same period, will pay Sh. 29,700, compared to Sh. 33,800 that it would have paid under the current structure.”
Pavel Oimeke, director-general ERC, said the new tariffs were based on consultations held with different stakeholders and also informed on the need to look into consumer issues as well as the need to make power utilities sustainable.
“The commission took into consideration best practices in tariff setting that emphasise social equity, economic prudence and financial viability of sector utilities,” said Mr Oimeke when he released the new tariffs in Nairobi.
Adds the Standard: In the new structure, which becomes effective tomorrow, domestic consumers will pay Sh. 16.60 per unit of electricity consumed, a six per cent reduction from the current Sh. 17.8 per unit. The consumption charge is usually in addition to variable such as the fuel cost charge.
Oimeke said there was an overall reduction in the amount paid by domestic consumers within the lifeline tariff, which is a subsidised regime for low-income customers using under 10 units per month.
This accounts for about half of Kenya Power consumers. It previously allowed customers to use up to 50 units at a subsidised rate.
