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Epra probes Kenya Power hidden token pricing

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EPRA director-general Pavel Oimeke. FILE PHOTO | NMG

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Summary

  • Energy and Petroleum Regulatory Authority (Epra) on Thursday said it would seek reasons behind the shift in the bill statement amid concerns of a possible breach of consumer rights.
  • The Consumer Protection Act 2012 demands that consumers are provided with full information, including the price and quality of any product they purchase.

The energy regulator is investigating Kenya Power #ticker:KPLC after the utility firm stopped providing pre-paid consumers with a breakdown of their electricity bills, denying households an opportunity to interrogate their payment statements.

The Energy and Petroleum Regulatory Authority (Epra) on Thursday said it would seek reasons behind the shift in the bill statement amid concerns of a possible breach of consumer rights.

Consumers have since early this month been receiving payment statements via their phones with a breakdown of charges like the monthly variable items like fuel and foreign exchange adjustments expenses lumped together.

This makes it difficult for consumers to establish whether the costing on their bills matches the unit prices for various items like tax, regulatory levies and other surcharges with data published monthly in the Kenya Gazette by Epra.

“We have taken note of this matter and are currently probing to establish the reasons behind it. Once we arrive at the conclusion of our investigation, we shall make the findings public and take necessary regulatory actions,” Epra director-general Pavel Oimeke told the Business Daily on Thursday.

The Consumer Protection Act 2012 demands that consumers are provided with full information, including the price and quality of any product they purchase.

Previously, Kenya Power provided details on payment of value-added tax, Epra levy, inflation adjustment, water regulator fees as well as foreign exchange and fuel adjustment surcharges.

Now, these charges have been lumped together and appear as other charges in payment statements sent to the mobile phones of more than six million of consumers hooked to the utility firm’s pre-paid billing systems.

A wobbly shilling and heavy reliance on diesel-powered generators to produce electricity due to low water levels in the country’s hydro-electric dams have been blamed for the rise in fuel surcharge and forex adjustment costs.

A weak shilling means fuel import costs have been rising.

Without details of fuel costs charge, consumers are unable to gauge how the use of expensive thermal electricity on the national grid is affecting electricity prices.

Kenya Power was recently on the spot for giving preference to expensive thermal power over cheaper options such as geothermal and hydro, effectively setting up consumers for higher electricity prices.

September data by Epra revealed that Kenya Power had picked the highest proportion of the expensive thermal power in more than a year while reserving the lowest slot for the cheaper geothermal power.

As a result, consumers paid a higher fuel cost charge — which is influenced by the share of electricity from diesel generators — of Sh2.6 per kilowatt-hour, up from the Sh2.4 since May 2020.

KenGen, which had a reduced output from geothermal, said it had given Kenya Power some 499.7 megawatts, but only 410.3 megawatts was taken up, leaving 89.4 megawatts unused.

The new bills will also not reveal how much consumers will be paying to fund Epra not long after the Energy ministry successfully pushed to have the levy doubled to a ceiling of one per cent and not the Sh0.3 cents per unit purchased.