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Economy

State subsidises 70pc of power bills on low usage

Nandi County resident Elizabeth Cherotich, switches on a bulb in her house after power connection last October. PHOTO | JARED NYATAYA | NMG
Nandi County resident Elizabeth Cherotich, switches on a bulb in her house after power connection last October. PHOTO | JARED NYATAYA | NMG  

Electricity bills for 70 per cent of Kenyan homes are fully subsidised by the government, making them enjoy a discount of 80 per cent.

A power sector study authored by former chairman of Energy Regulatory Commission Hindpal Jabbal indicates that seven out of every 10 homes are low electricity consumers using between 0 and 50-kilowatt hours (kWh) a month.

Homes that consume less than 50kWh monthly households are regarded poor and enjoy cheaper tariffs, dubbed lifeline tariff at Sh2.50 per unit.

Those consuming more than 51 units are charged Sh12.75 kWh.

The subsidy sheds light on the State’s burden of keeping power affordable to poor homes besides offering subsidies in connecting new domestic customers to the power grid.

The 50 kWh last month cost Sh590 while wealthy consumers paid Sh3,700 for 200kWh.

The low consumption segment accounts for 70 per cent of Kenya Power’s #ticker:KPLC 5.9 million customer base, equivalent to 4.1 million users.

Electricity customers have grown fivefold over the past seven years from one million in 2010 to 5.9 million currently while demand for electricity has grown 28 per cent since 2011.

This indicates the rising number of low electricity users have had little impact on growth in demand.

The power sector report indicates that electricity demand has trailed customers’ growth the period, rising by an average of six per cent annually, which is short of the government’s growth projection of up to 15 per cent a year. Peak demand is now at 1,649 megawatts.

“Our load (demand) growth is sluggish since the bulk of customers are low-demand domestic customers and this is likely to remain so in the near future, unless industrial and commercial activity intensifies,” said Jabbal, an energy consultant and author of the study.

Demand remains paltry among low-income homes since their main use of electricity is lighting, TVs and charging phones, making Kenya’s power consumption per capita low.

Pecking order

The manufacturing sector, the biggest user of electricity, has stagnated at an average of 10 per cent over the past 10 years.

The study shows that middle-class homes that consume between 50 and 200kWh monthly account for about 15 per cent of electricity customers. The highest user in this category forks out nearly Sh4,000 a month.

Next in the pecking order are homes using between 200 and 1,000 units (17 per cent of power users) monthly and pay an average of Sh7,000, according to the report.

Only 0.3 per cent of Kenya Power’s domestic customers use electricity above 1,000 units and paying an average of Sh30,000 monthly.

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