Kenyans can be relieved after the government reduced the cost of purchasing Kenya Power Limited Company (KPLC) electricity tokens for the second consecutive month.
The prices of electricity have dropped by an average of Ksh 1 per unit in March 2024.
This came after the Energy and Petroleum Regulatory Authority (EPRA) lowered the energy fuel costs from KSh4.14 per kilowatt-hour (kWh) in February to KSh3.64 in March.
Kenya Power increased purchase of cheaper hydropower to 260.88 million units in February, an increase from 253.4 million units in January, reducing bill pressures.
“Pursuant to Clause 1 of Part III of the Schedule of Tariffs 2023, 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 364 Kenya cents per kWh for all meter readings to be taken in March 2024, EPRA director general Daniel Kiptoo said in a gazette notice.
Further, the foreign exchange rate fluctuation adjustment went up from Ksh3.22 in February to Ksh3.68 in March, denying consumers cheaper electricity.
The exchange rate also reflects the cost of servicing foreign currency loans used to finance power generation.
Why Kenya Power Token Prices Reduced
The recent drop in prices is attributed to cheap hydropower and strengthening of the shilling against the dollar.
The drop in token prices was also as result of the reduction in the Value Added Tax (VAT) and the Fuel Energy Charge paid during the purchase.
“Fuel Energy Charge is the added cost or rebates to the consumers as a result of fluctuations in world prices as well as fluctuations in the quantity of oil consumed by electricity generation. The fuel cost charge lags one month behind the actual price of the fuel.
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KPLC managing director Joseph Siror assured consumers that the prices of electricity would reduce in the coming months due to the strengthening of the shilling.
“For long, foreign currency was not available thus the increased payments which ultimately will level out as we clear the backlog of payments,” Siror said.
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February Prices also Dropped Compared to January
In February, the cost of electricity for all categories of power consumers dropped Ksh.3.44 per unit.
Energy Principal Secretary (PS) Alex Wachira explained that the cost reduction was as a result of a drop in foreign exchange adjustment rates.
“Foreign exchange adjustment dropped from Ksh.6.46 per kilowatt hour to Ksh.3.22 per kilowatt hour owing to a decrease in the total foreign currency exchange payments made in January,” he said.
The drop in token prices was also a result of a marginal reduction in the fuel energy cost which dropped by 19 cents.
