Erratic short rains fuel power bills to record high levels

Electricity consumers will next month pay a record Sh7.90 for a unit of power to finance the running of diesel powered plants across the country despite the ongoing rains in catchments areas that should reduce dependence on expensive generators in favour of the cheaper hydro power option.

Power distributor Kenya Power and Lighting Company has through the latest Kenya Gazette served notice to consumers that the fuel cost surcharge on their power bills will next bills will next month be Sh7.90 per unit - the kilowatt hour - up from Sh7.75 on this month’s power bill.

This is the highest the fuel cost component - which is now the most expensive item on the power bills - has reached since consumers started paying for the fuel used in power generation in 1997. The money is collected by KPLC on behalf of producers who supply power to the company for distribution.

At present, domestic consumers pay between Sh2.20 and Sh4.40 per unit on the consumption charge, which means that the fuel charge is nearly double the consumption charge.

The average cost for a unit of electricity - the kilowatt hour - is Sh6.50 - across the various segments of consumers.

Other minor components of the bill include charges on foreign exchange, inflation and taxes and levies.

Adverse impact

Apart from the adverse impact on household budgets the fuel cost has a domino effect on the economy with industries forced to charge consumers more for goods, raising inflationary pressures and hurting the competitiveness of Kenya’s exports in the region and overseas.

A steep drop in hydro power’s contribution to the national grid has seen electricity bills surge by a margin of 60 per cent since March on the back of rising fuel costs charges -- a varying item on the bills that is linked to the amount of power on the national grid that is generated from the expensive thermal sources.

Executives in the power sector are warning consumers to brace for further hikes in coming months as the country taps deeper into fuel driven power generators to offset the lower contribution of hydro power to the national grid.

“We have not had good rains as earlier anticipated and this means fuel costs charges will be sustained or change slightly upwards,” said Joseph Njoroge, the managing director of KPLC on Friday.

The Meteorological Department had forecast that the country will receive above normal rainfall during the short rainy season—raising expectations that the country’s depleted hydro power dams would be replenished.

This signalled a drop in the cost of electricity as the country was expected to consume more of the less expensive hydro power and cut back on the more expensive thermal power.

But the weatherman’s forecast of heavy rainfall especially in Eastern and Central provinces, where a significant number of the country’s least-cost hydro generation plants are located, has not come to pass.

The lower than expected rainfall the country has witnessed over the past two years has cut the contribution of hydroelectric power by nearly half, leading to the closure of some plants such as Masinga power station in June due to low water levels.