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Economy

ERC study puts cheap night electricity tariffs in limbo

Kenya Power and industrialists failed to reach a deal on the discount to be offered on the off-peak tariff. FILE PHOTO | NMG
Kenya Power and industrialists failed to reach a deal on the discount to be offered on the off-peak tariff. FILE PHOTO | NMG 

Kenya’s plan to introduce cheaper off-peak power tariffs as an incentive for manufacturers to shift their production to late night hours is in limbo after a study found it unviable.

The Energy Regulatory Commission (ERC) said the study by German consultant, Lahmeyer International, found the plan would yield “little benefits” in terms of power cost discounts to manufacturers and economic merit of night power consumption.

The limbo has denied consumers cheaper goods since Energy ministry officials expected industrialists to cut prices in return for the proposed lower power bills.

The special night tariffs have delayed for more than 10 years since the government first mooted the plan meant to slash production costs and ease pressure on power supply during the daytime.

“The report indicated little benefits on the basis of discounts and load balancing. We are reluctant to implement it for now,” said ERC director of electricity Joseph Oketch.

The ERC had hired the German consultancy which teamed up with its local associate, Feradonto, to conduct the tariff study that involved audits on the cost of generating, transmitting and distributing power.

Had it come into effect, the off-peak power plan would have seen industrialists enjoy a discount on the current tariffs between 11pm and 5am, when demand is low.

It was meant to encourage industries to shift production to the off-peak period in a move that would lower demand for power during peak hours, helping Kenya utilise its energy resources prudently.

But electricity distributor Kenya Power #ticker:KPLC and industrialists failed to reach a deal on the discount to be offered on the off-peak tariff, prompting delays and the study to inform the rates.

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