Electricity bills shock as prices jump highest since May 2014

Politics and policy

Geothermal power production at Menengai, Nakuru. This cheaper energy source was expected to cut electricity costs. PHOTO | FILE 

By NEVILLE OTUKI, notuki@ke.nationmedia.com

Electricity bills have jumped by the highest margin since May last year, reflecting the impact of increased use of expensive thermal power on household budgets.

Kenya National Bureau of Statistics (KNBS) data shows households that consumed 200 kilowatt hours (kWh) of electricity paid Sh3,684 up from Sh3,291 the previous month, or Sh393 more.

Homes using 50 units paid Sh605 up from Sh507, or a Sh98 increment, which is the highest rise since last May when electricity costs rose by Sh111.

This also marks the biggest jump in electricity prices since Kenya injected additional 280 megawatts of cheaper geothermal power between August and December, which were expected to cut energy costs significantly on reduced use of thermal power.

But the shutdown of a number of geothermal power plants forced Kenya Power to seek more expensive thermal power.

An extra fuel charge is added to normal power rates depending on the amount of diesel generation used and global fuel costs.

The fuel cost charge hit a nine-month high of Sh3.11 per unit this month, up from Sh2.51 in July, and above the government target of keeping the surcharge at between Sh2-Sh3 per unit.

The Energy Regulatory Commission (ERC) had faulted the heavy uptake of thermal electricity and directed Kenya Power to revert to a mix that would stop the cost surge.

“Cheaper hydro-power generation has not been aggressively pursued despite fairly good water levels,” the ERC said, adding that it will be watching the power distributor closely “to avoid defaulting on our commitment to keep power costs down.”

Last month, thermal accounted for 18.6 per cent of electricity bought by homes and businesses, up from 10 per cent in December.

Reducing the cost of energy has been a key plank of President Uhuru Kenyatta’s economic agenda that is aimed at making locally produced goods competitive in local and foreign markets as well as slowing down inflation.

READ: Kenya Power on the spot over rising electricity cost

Businesses have in recent years complained that expensive power makes Kenya’s products uncompetitive.

Though the additional cheaper geothermal cut electricity costs by nearly a quarter since last August, homes have seen little changes when the comparison is stretched to more than 18 months ago.

Households consuming 50 kWh paid Sh517 in December 2013 — which is lower than the Sh605 they paid last month. But the additional geothermal power helped curb the rise in the fuel charge, which peaked at Sh7.22 in August, and a further escalation in billings.