September power bills unchanged as forex and fuel levies remain flat

Artwork of an illuminated light bulb. September electricity bills will remain unchanged for the third consecutive month in a row as fuel and foreign currency charges remain flat.  

By NEVILLE OTUKI

In Summary

• The hydropower levy is up seven per cent to Sh0.0253 per unit but has a negligible impact on consumer power bills.

September electricity bills will remain unchanged for the third consecutive month in a row as fuel and foreign currency charges remain flat during the period.

Official data shows that the fuel cost charge – which is linked to the amount of power generated from expensive diesel and supplied to the national grid – will remain flat at Sh2.31 per kilowatt hour (kWh) of electricity consumed this month.

It has remained unchanged for the past nine months since January, the Energy Regulatory Commission (ERC) data shows.

The forex levy – which is linked to foreign currency expenses incurred by Kenya Power and power producers like KenGen – will also remain unchanged this month at Sh0.84 per unit since August.

The ERC reviews the two surcharges every month alongside a charge associated with hydropower generation whose proceeds go to the Water Resource Management Authority (Warma) – the agency in charge of water in Kenya.

Negligible impact

The hydropower levy is up seven per cent to Sh0.0253 per unit but has a negligible impact on consumer power bills.

The levy last month dropped by a similar percentage point (seven per cent) but this failed to translate to a change in electricity bills.

Official data shows that homes consuming 200 units monthly paid Sh3,361 in August same as in July while users of 50 units continued to pay Sh525.
Homes and businesses consume an average of 800 million units (kWh) of electricity monthly.

READ: Kenya's power imports from Uganda rise 32 per cent

Power prices have a direct bearing on inflation which dropped to 6.26 per cent in August from 6.39 per cent a month earlier on lower food prices.
Power bills also come loaded with an inflation charge that currently stands at Sh0.29 per unit and is adjusted every six months or twice a year.

Consumers also pay a fixed charge of Sh150 through their power bills whether they use electricity or not.

The ERC every month receives power consumption data from electricity distributor Kenya Power to review the fuel cost levy, forex charge and Warma levy. The energy regulator uses data from the previous month to calculate the monthly variables.

Hydropower is Kenya’s cheapest power source at Sh3 per unit but is unreliable since it is dependent on weather.
Geothermal power is priced at about Sh7 per unit while diesel-generated power (thermal) tops Sh19.