Consumers to get reprieve as Kenya Power cuts costs
Power lines.
Consumers are set to save Sh393 million in power bills this month following a respite in international crude oil prices and stability of the Kenyan shilling. The relief also comes after increased hydro generation reduced the production of energy from expensive diesel plants.
Kenya Power says it will this month charge consumers Sh5.52 per kilowatt hour for fuel costs — a variable component determined by the amount of diesel used to generate electricity — compared to Sh5.97 in June and Sh6.97 in May.
“The fuel cost charge of Sh5.97 per kwh and foreign exchange fluctuation adjustment of Sh0.78 per kilowatt hour (kwh) have been calculated based on a drop in generation costs, and foreign exchange related payments, “ said Kenya Power, the electricity distributor, in a notice to consumers.
“All prices for meter readings in July will be liable to these adjustments.”
The 92 cents drop in fuel cost adjustment and forex means consumers will pay Sh579.6 million less for electricity this month compared to June, assuming the average monthly consumption of 630 million kilowatt hours.
However, the gain will be moderated by an inflation adjustment of Sh0.28 per unit which will apply for the next one month bringing the overall gain for consumers to Sh186.4 million.
KenGen, Kenya’s main power generator, said all the five dams—Kamburu, Gitaru, Kiambere, Kindaruma and Masinga dams were generating the maximum of 11 million gigawatt hours (gwh) out of the total requirement of close to 23 million gwh, reducing reliance on expensive diesel plants.
Consumers, however, are demanding more tariff adjustments given the easing in inflation and the drop in interest rates.
“We were hoping that the fuel cost adjustment would have been reduced by a minimum 30 per cent,” said Stephen Mutoro, secretary-general for the Consumers Federation of Kenya (Cofek).
Half of Kenya’s power output is generated from hydro sources, which at full capacity, would account for 67 per cent of the production with the rest coming from thermal, geothermal and wind installations.
Policy makers, however, say they are conserving some water for hydro-electric power generation during dry times expected to set in September.
The drop in the fuel cost adjustment has been helped by lower prices in the international oil markets and slight depreciation of the shilling against the dollar to 83.94.
Murban crude oil prices at the end of June were at $97 per barrel , down from $121.2 per barrel in April. Between January and March, crude oil prices in international markets jumped to $127 per barrel from $114.20 at the beginning of the year.
