Consumers to pay more as Kenya Power ends connection subsidies

Kenya Power managing director Ben Chumo: He said the old power connection scheme of Sh35,000 will be retired on April 3. PHOTO | FILE 

By NEVILLE OTUKI, notuki@ke.nationmedia.com

In Summary

• The Sh35,000 connection fee that applicants have been paying will cease to apply from April 3 when the subsidy is expected to come to a close.
• Kenya Power has been charging the Sh35,000 fixed charge for electricity connections as per the rates introduced 12 years ago to deepen access to electricity.

Electricity distributor Kenya Power will next month stop charging the subsidised connection fees that the Jubilee government ordered upon coming to power — setting new electricity consumers up for higher charges.

The power firm yesterday said the Sh35,000 connection fee that applicants, whose buildings are located within 600 metres of a transformer, have been paying will cease to apply from April 3 when the subsidy is expected to come to a close.

“The old power connection scheme of Sh35,000 will be retired on April 3,” Kenya Power managing director Ben Chumo told Parliament’s Energy Committee, adding that the actual market rates will kick in on that date.

Small rural homes will, however, start enjoying a lower connection fee of Sh15,000 under the Last Mile Connectivity Project (LMCP) that aims to remove darkness from villages and trigger economic activity.

READ: Kenya Power to start connecting homes at Sh15,000

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Dr Chumo said the real cost of a single-phase connection stands at Sh100,000, meaning the cost of getting electricity to new buildings will more than triple beginning next month.

The higher charges are set to further make home ownership an expensive affair, especially in towns where construction of large units attracts multiple regulatory levies.

Kenya Power has been charging the Sh35,000 fixed charge for electricity connections as per the rates introduced 12 years ago to deepen access to electricity.

In 2013, the utility firm unsuccessfully sought to double the connection fee to Sh70,000 for those living within 600 metres of a transformer but the newly elected Jubilee government stopped the plan.

Sh2.7 billion subsidy

Kenya Power has argued that the cost of materials, labour and transport has significantly increased since the current fees were set in 2004, necessitating an increment.

Government officials, however, declined to approve the fee increase on grounds that it would lock out homes and businesses from accessing electricity and dampen growth.

The Treasury, in return, offered Kenya Power a Sh2.7 billion subsidy to retain the connection fee at Sh35,000 but the cash supply would soon be cut off, leaving the utility firm with the burden of carrying the rising costs.

While it lasted, the subsidy had also made it possible for Kenya Power to retain the fee for a three-phased electricity connection within a radius of 600 metres from the nearest transformer at Sh45,000.