Electricity prices have risen for the third time in four months by a 5.2% margin, after the regulator, Energy and Petroleum Regulator Authority (EPRA), adjusted the fuel cost and inflation components of the bill.
The foreign exchange components of the power bill, the increase in fuel prices and the weak shilling have contributed to the changes in electricity costs.
EPRA said that electricity consumption stood at 1.11 billion units in August, just before the government eliminated the 15 per cent power reduction effected in January 2022.
In September 2022, EPRA announced an increase in power rates by 15.7 per cent, erasing the 15 per cent decrease posted in January this year by the former President Uhuru Kenyatta administration, in what has handed consumers a twin blow in the wake of higher fuel prices.
Households and businesses consumed less electricity in the month of September, consumption dropping by 11.83 million kilowatt-hours (kWh) from August.
In October, the Fuel Cost Charge increased to Ksh 7.09 per unit of electricity consumed from Ksh 6.79 consumed in September, while the Foreign Exchange Fluctuation Adjustment stood at Ksh 1.48 per unit with the latter month at Ksh 1.37 per unit.
In the month of December, the Energy and Petroleum Regulatory Authority (Epra) raised the fuel cost charge (FCC) from Sh6.36 per unit to Sh7.12 per unit, and the foreign exchange rate fluctuation adjustment (Ferfa) from Sh1.41 to Sh2.07 per unit.
“Pursuant to Clause 1 of Part III of the Schedule of Tariffs 2018, notice is given that all prices for electrical energy specified in Part II of the said Schedule will be liable to a fuel energy cost charge of plus 712 Kenya cents per kWh for all meter readings to be taken in December 2022,” said Epra Director-General Daniel Kiptoo in a gazette notice.
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With the increase in electricity costs, households will be required to spend or budget more money under power.
The shilling is currently at an all-time high of 122.8324 against the dollar, raising the cost of imports of a wide variety of goods, including petroleum products, wheat, second-hand clothes, motor vehicles, vegetable oils and industrial machinery.
With electricity being a key economic enabler, the knock-on effect of this move will have a spiral effect on various sectors, further increasing the cost of living for ordinary Kenyans.
An increase in energy prices pushes up the cost of production, translating to more expensive consumer goods.
With this, plus higher taxation and levies on electricity that will see the cost-of-living rise, Kenyans are finding it hard to meet their daily needs.
In this festive season, Kenyans are travelling to the rural areas, required to buy food and other products out of their normal budgets in the light of Christmas.
High electricity costs further signal a costlier Christmas for both household and industrial customers at a time manufacturers are ramping up production of especially fast-moving consumer goods to meet the annual uptick in demand during the festivities.
One of easiest and most effective ways to save some money and reduce your energy bill is turning off your lights when you aren’t using them. So even though your string lights are festive and merry, turning them off a few hours a day can help you save a lot.
High electricity costs mean a decline in power usage which could reflect a slump in economic activity or businesses and households seeking other cheaper alternatives such as solar power to save their expenses.
Kenyans are subsequently set to see higher electricity prices as they head into 2023 even as Kenya Power applies for a tariff review from EPRA which could further set electricity prices higher.