Geothermal fails to cut electricity costs in Uhuru era

A Kenya Power worker inspects a distribution line. FILE PHOTO | NMG 

By NEVILLE OTUKI

More by this Author

Summary

• The latest Economic Survey shows that average power tariffs shot up to Sh15.65 per kilowatt hour (kWh) in 2017, from Sh14.68 the previous year and from a low of Sh14.38 in 2012.
• Average power tariffs shot up to Sh15.65 per kilowatt hour (kWh) in 2017, from Sh14.68 the previous year and from a low of Sh14.38 in 2012.
• Though the cheap steam energy led to a drop in use of expensive diesel-generated power and lowered the fuel levy component in bills, the gain was offset by new Kenya Power tariffs that took effect in 2014.

The cost of electricity under the Jubilee administration is higher compared to the rates that prevailed during the Kibaki regime despite the injection of 280 megawatts of cheaper geothermal energy to the grid, official data reveals.

The latest Economic Survey shows that average power tariffs shot up to Sh15.65 per kilowatt hour (kWh) in 2017, from Sh14.68 the previous year and from a low of Sh14.38 in 2012.

Average power tariffs shot up to Sh15.65 per kilowatt hour (kWh) in 2017, from Sh14.68 the previous year and from a low of Sh14.38 in 2012.

“The average electricity tariff is calculated by dividing total revenue received by total units sold,” reads the survey.

The injection of additional geothermal energy into the grid in the second half of 2014 failed to lower power bills when the comparison in charges is stretched to five years ago.

Though the cheap steam energy led to a drop in use of expensive diesel-generated power and lowered the fuel levy component in bills, the gain was offset by new Kenya Power

tariffs that took effect in 2014.

READ: Uhuru's cheap power pledge unfulfilled on high tariffs

The tariff raised the fixed charge — payable regardless of consumption levels — to Sh150 per month, from Sh120, along with the energy charge.

The relatively higher prices have also been linked to revision of value added tax (VAT) on electricity from 12 per cent to 16 per cent in September 2013.

In Kenya, 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 now stands at a 42-month high of Sh5.35 per unit, with latest rally linked to increased use of diesel generators as bad weather reduced the use of cheaper hydro power.

Official data shows that power bills for homes that consume 50 units of electricity a month, mostly low-income earners, crossed the Sh700-mark for the first time this year, making electricity among the fastest rising basic household items.

READ: Kenyatta orders audit of thermal plants amid high cost of power

Users of 50 units paid Sh730 in March, up from Sh682 a month earlier, and an average of Sh575 in 2013.

Consumers of 200 units per month, mostly middle class, paid a record high of Sh4, 262 last month, up from an average of Sh3, 727 last year and Sh3, 066 in 2013.

Electricity prices have a direct bearing on inflation, being one of the items in the basket of goods and services whose pricing is tracked to measure the cost of living.