The Kenya Power company. Following new electricity tariffs announced by
the Energy Regulatory Commission (ERC) and that took effect on Sunday,
November 1, 2013, consumers should brace themselves for a new wave of
price hikes as the new electricity tariffs come into force, effectively
raising operation costs for industries. Kenya Power corporate affairs
manager Migwi Theuri has confirmed that the rates are already in effect.
PHOTO/FILE
Consumers should brace themselves for a
new wave of price hikes as the new electricity tariffs set by the energy
regulator last month come into force, effectively raising operation
costs for industries.
The new tariffs, announced by the
Energy Regulatory Commission (ERC), took effect on Sunday and will be
applicable in the three-year period to June 2016.
Though
small domestic consumers are expected to enjoy a slight decline in the
cost of power in the new regime, the benefits are likely to be eroded as
big industrial consumers pass on the cost through higher pricing of
their goods.
Speaking to the Nation on the phone Monday, Kenya Power corporate affairs manager Migwi Theuri confirmed that the rates are already in effect.
Customers
on prepaid meters started noticing the change on tokens bought since
Sunday, while those on post pay will notice the change in their next
month bill.
“The new rates were to take effect on December 1 and they have.
For pre-paid customers the rates have taken effect but those of post- paid will reflect in the December bills,” Mr Theuri said.
Under
the new rates, ERC directed that Kenya Power charges Sh15.51 per unit
of electricity as a base tariff starting December 1, 2013 to June 2014,
down from Sh15.59 per unit that has been charged before this review.
The tariff will then drop to Sh13.44 and Sh12.66 per unit of electricity in the two subsequent financial years to June 2016.
As
a result of a marginal cut in the tariff to be applied during the
current financial year, only domestic consumers spending up to 50 units
of electricity per month and small commercial enterprises will get a
reduction of 7.9 per cent and 2.5 per cent respectively.
These
consumers constitute 69 per cent of Kenya Power’s total customers,
leaving the middle class, high income consumers and heavy industries to
face increases of between 3 and 12 per cent in the monthly bill during
the period, before the rates stabilise in the medium term.
The rising cost of power is expected to trigger new inflationary pressure on the economy, further burdening consumers.
ERC last month said it had discussed the new figures with the Kenya Power and the utility firm had no option but implement them.
“If
they (Kenya Power) charge anything more than that they will be in
complete violation of the law,” said Fredrick Nyang, acting director
general of ERC.
The Kenya Power had asked for increase of the base tariff that was submitted to the ERC on February 11, 2013.
ERC
however declined on grounds that during the tariff control period, the
company will be able to purchase “cheap” electricity, generated from
renewable sources such as hydro, wind and geothermal in power plants
that are scheduled to be set up under the government programme to
develop 5,000 megawatts of electricity in 40 months.
The last tariff review was carried out in 2008.
Even
though ERC is required by law to carry out the exercise every three
years, in 2011 the regulator declined to review the tariff due to a need
to protect consumers from escalating inflation and a deteriorating
exchange rate.
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