The Energy Regulatory Commission ERC has scrapped the Ksh 150 fixed charge on electricity, cutting down domestic consumers’ retail tariff by 36 per cent and reducing fuel energy cost to 2 shillings and fifty cents per unit. This means that one kilowatt of electricity will cost 16 shillings and 64 cent, down from the previous 17 shillings and 77 cents.
“To ensure that there’s equity and consumers pay for power only when they consume, all fixed charges for all consumer categories have been removed. This is meant to reduce the many cost items in the customer bills & simplify understanding of the bills,” the energy regulator said in a tweet.
The Commission has this morning announced the new electricity tariff for the Tariff Control Period (TCP) 2018/19. #ElectricityTariff2018-2019 ^AM
— Energy Regulator KE (@energy_ke) July 30, 2018
Energy tariffs have been a thorny issue in Kenya, causing widespread outcry among consumers and the manufacturers.
Despite a steep rise in the generated energy and a growing mix of wind, solar and geothermal, the cost of energy is considered to be high by the World Bank.Under the new regime the 150 shillings standing charge has been abolished while the fuel cost charge will drop to Sh2.50 per unit from Sh4.60 in July.
The Commission approves the retail electricity tariff as follows:
a. The overall unit cost of power reduce from Kshs 17.77/KWh in 2017/18 to Kshs 16.64/Kwh 2018/19 representing an overall reduction… https://t.co/cQZnSsVnMz
— Energy Regulator KE (@energy_ke) July 30, 2018
Foreign exchange adjustment will reduce to five cents in August from Sh1.22. Inflation adjustment, which is revised every six month will be charged at five cents from 52 cents. However, the energy regulator has left the Water Resource Management Authority-WARMA, Rural Electrification Authority – REA and ERC Levies unchanged.
New electricity tariffs as presented by ERC Director General @PavelOimeke at Crown Plaza this morning. The more you consume the cheaper it will be for you. @EnergyPress @energy_ke #NewElectricityTariffs pic.twitter.com/et7hbpY7i1
— Consumer Grassroots Association (@_CGAKenya) July 30, 2018
Kenya Power will have to improve its distribution channels, with ERC cutting system loss factor from 16% to 15 percent starting August this year. Commercial and Industrial customers on the average will get a reduction of 4.4%. This is in addition to the 50% discount in the time of Use Tariffs and the proposed Special Economic Zone tariff.
The Fixed Charge Cost (FCC) for all consumer categories has been removed from the bill by the Electricity Sub Sector Regulator @Energy_Ke today. ^KK
— Kenya Power Limited (@KenyaPower) July 30, 2018
For large Commercial consumers and Industrial consumers, the government will be encouraging them to expand consumption by deepening the Time of Use Tariff application in the Tariff Control Period.
Despite the efforts by the energy regulator to rein in energy tariffs, power bills are likely to be impacted by inflation charges, fuel cost and forex exchange variations which are beyond the control of the government.
To help stir commercial and industrial production, ERC approved an average of 4.4 percent reduction on electricity bills in this category. These category includes both small and large industrial consumers who form the core production scale in the country#ElectricityTariff2018
— Ministry of Energy (@EnergyMinK) July 30, 2018