Agency to hit consumers with another levy increase

Tuesday, January 31st, 2023 09:30 | By
Agency to hit consumers with another levy increase
Daniel Kiptoo, EPRA Director General speaks during the validation workshop in Nairobi yesterday. PD/ALICE MBURU

Kenyan households face more burden to purchase a single unit of electricity after the Water Resource Management Authority (WRMA) proposed to hike the water levy on sold power by 40 times.

The proposal, which has since been submitted to the Energy and Petroleum Regulatory Authority (Epra) for approval, will see the WRMA levy rise from the current Sh0.05 per kilowatt-hour (kWh) of electricity to Sh2 per unit.

The levy follows a prior request by Kenya Power to increase base electricity costs and will add to the number of pass-through costs that have recently been revised upwards by Epra.

The levy by WRMA  is among the additional charges that different government bodies often request to be loaded per unit of electricity sold by Kenya Power, with further hikes always impacting the overall end costs. Apart from it, the other six charges loaded on the electricity bills include value-added-tax (VAT), inflation adjustments, forex charge, fuel cost charge, EPRA levy, and REP levy.

Energy regulator

“In terms of our position as the energy regulator and position of the sector is that the increase will also have an impact on this tariff review and the impact will be a further increase in the cost of power because this is another government body we are engaging internally through the ministry of water and ministry of energy,” EPRA Director General Daniel Kiptoo said.

WRMA levy, collected by Kenya Power on behalf of the water authority, is usually meant for improving the country’s water catchment areas to maintain the water levels thus sustaining continued production of hydro-power, the country’s major contributor to the power mix.

Kenya Power had proposed to increase power cost for domestic consumers to 21.68 per unit, excluding the current taxes and levies that amount to about Sh13. Factoring in the levies at their current rates, it means the electricity will be up by about 68 per cent to cost Sh34.68 per unit, from the current Sh20.5 per unit used by domestic consumers. Kenya Power, however, estimates a contradicting figure that the electricity tariffs will rise by only 20 per cent inclusive of the taxes should their proposals get approved.

Consumer category

The utility further argues that without the WRMA levy, the power hike would have been at a slower rate of 18 per cent for the domestic users and 11 per cent (instead of its project 13 per cent) for those falling under the lifeline consumer category. Consumers under the new life-line consumption band of below 30 kilowatt-hours (kWh) per month will pay a new tariff of Sh14 per kWh minus levies.

These consumers are estimated to be about 6.3 million in total compared to about 1.7 million consumers under the domestic category who will now face higher costs due to a graduated tariff rate.

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