Breakdown of how new electricity tariffs will affect your monthly bills from April 1

Sunday, March 26th, 2023 12:29 | By
electricity tariffs
A client feeds his electricity power token machine. PHOTO/PRINT/FILE

The Energy and Petroleum Regulatory Authority (EPRA) has released new electricity tariffs which will take effect on April 1, 2023.

This follows the submission of a Retail Tariff Application (RTA) by Kenya Power for the 4th Tariff Control Period.

EPRA says the new electricity tariffs will have the bills of 74% of domestic customers who are low consuming reduce by four percent from April 1, 2023. The low-consuming customers (customers consuming less than 30 units per month) will have their bills reduced from Ksh21.99 to Ksh21.16 per unit.

This means Ksh500 will yield 23.6 units in April, up from 22.7 units currently.

In the changes, domestic customers consuming between 30 and 100 units per month will have their tariffs increased from Ksh21.99 to Ksh26.10 per unit (19% increase). This means Ksh500 will give you 19.2 units in April compared to the current 22.7 units.

Other domestic customers consuming above 100 units will have their tariffs increased from Ksh27.92 to Ksh31.75 per unit (14 percent increase). This means Ksh500 will give you 15.7 units in April compared to the current 17.9 units.

New electricity tariffs for SMEs

EPRA says that in the new tariffs, 53 percent of SME customers' category will also realize a four percent reduction in their bills from April 2023.

On the other hand, manufacturers will get an average of two percent relief on their bills from April 2023.

EPRA has also introduced special tariffs to promote both clean cooking and electric mobility to grow electricity demand and promote the global agenda on climate change and sustainability.

"(There is) introduction of Bulk Tariffs applicable to SMEs, and commercial and industrial customer categories to encourage retail electricity business which is expected to increase efficiency and improve customer experience. (There is also) introduction of Time of Use tariff for SMEs at half the energy charge to promote extended business operations," the regulator said.

EPRA has approved target benchmarks that Kenya Power should achieve over the period of the tariffs in order to ensure accountability and proper use of the resources availed to them.

"This provides an incentive to KPLC to consistently improve on power quality and reliability," EPRA said.

Street lighting tariff has been reduced by nine percent to enhance security and promote the 24-hour economy.

This comes at a time Kenya Power is planning to start collecting bill payments from a section of its customers through foreign currencies such as the dollar and the Euro.

Speaking to Pèoplè Daily, Kenya Power General Manager for Finance Stephen Vikiru Kinadira said that the move is aimed at customers who mostly earn through foreign currency, but are forced to convert their currencies to Kenyan Shillings to pay electricity bills.

In turn, the power distributor is forced to go back to the banks to buy dollars to cater for its financial obligations, most of which are billed in foreign currency.

With a shortage in foreign currency reserves, the utility company at times is unable to get enough currency to pay its suppliers, and even service its debts.

“Over the years there has been stability in terms of the rates. We have never had, in my knowledge, a situation where we had a serious scarcity of foreign currency as we have seen in recent months. That creates the unique situation that we are in, When you put together the challenge of volatility that is across the globe and you add to the issue of scarcity then the rates are now skyrocketing,” Kinadira said.

As it stands, the power distributor is awaiting approvals from the National Treasury to open Dollar and Euro collection accounts before rolling out the initiative.

The company requires USD 50 million and 20 million Euros for power purchases, while at least USD30 million is required on a quarterly basis to repay loans.

At times, Kenya Power has not been able to meet all its obligations in time due to dollar shortage, as Vikiru reveals.

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