Utility bills rise as power cost hits two-year high

Kenya Power will raise the fuel adjustment surcharges on this month’s electricity bills to a two year high, ushering in a period of high utility charges as water firms also raise rates.

The power regulator says it will raise the fuel surcharge from the current Sh5.19 to Sh7.22 on bills to be settled next month, pushing the adjustment to the highest level since April 2012.

The heavy reliance on diesel-powered generators to produce electricity — due to low water levels in the country’s hydro-electric dams — has been blamed for the rise in the fuel adjustment costs.

This emerges in a period where water companies in Nairobi, Kisumu, Eldoret and Nakuru are planning to increase consumer water tariffs by up to 100 per cent in what will pile inflationary pressure on the country’s economy.

The Energy Regulatory Commission says the water levels at the Masinga Dam—which supports the bulk of Kenya’s hydro-electric dams — is at 36 per cent due to the delayed March-May long  rains.

“The generation from hydropower dams has been reduced by 210 megawatts during evening peak and 460 during the morning peak,” said ERC in a communication. 

“As a result of enhanced thermal generation, fuel cost charge in customer bills will rise… starting with May bills going forward.”

ERC hinges the drop on the fuel cost charge to injection of 280 megawatts additional geothermal power to the national grid between July and September.

Recover costs

The water regulator is also on course to approve the new higher water tariffs to allow the service providers recover costs like electricity, water treatment chemicals, pipes and fuels charges as well access additional cash for new investments. 

The utility bills adjustments are expected to put more upward pressure on Kenya’s inflation rate, which rose to 6.41 per cent in April from 6.27 per cent in March.

Housing, water, electricity, gas and other fuels carry an 18.30 per cent weighting in the basket of goods used to measure inflation.