Relief for households as ERC reduces power tariffs

A Kenya Power worker. FILE PHOTO | TOM OTIENO | NMG 

By CONSTANT MUNDA

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Households consuming a maximum of 100 kilowatt-hour (kWh) will pay reduced charges of Sh10 per unit after energy sector regulator on Wednesday increased the lifeline (subsidy) threshold to 100 units from 10 units announced in July.

This, however, does not factor include variable pass-through charges such as 16 per cent valued added tax (VAT), fuel cost charge, forex charge and inflation.

The review, which takes effect Thursday (November 1), will also see small businesses consuming up to 100 units pay a reduced charge of Sh10 per unit from Sh15.60.

The amended tariff structure follows President Uhuru Kenyatta's directive to the Energy Regulatory Commission (ERC) on October 16 to lower power tariffs for dominant small and medium-sized enterprises (SMEs).

“The commission has also put into consideration the views of the public on power bills post July 2018,” ERC director-general Pavel Oimeke said at a news conference, adding that further views came from legislators.

In the electricity tariff structure, only households using up less than 10kWh had been granted a discounted charge of Sh12 per unit, with those consuming higher electricity levied Sh15.80 per kWh.

The new structure will now see homes incur a bill of Sh1,517 in November, 31.63 per cent less than Sh2,219 in October if VAT and adjustable costs were to remain constant.

“The lifeline tariff is meant to accommodate more households in informal settlements, urban, peri-urban and rural areas to cushion them from increased of living. This will cover 5.7 million customers,” Mr Oimeke said.