Industrial and commercial firms saved Sh947.3 million on electricity bills between July and December last year due to the increased use of a night tariff that is meant to encourage consumption of power during off-peak hours.
Official data from the Energy and Petroleum Regulatory Authority (Epra) shows that the savings jumped 72.5 percent from Sh549 million in the same period of 2022.
The jump highlights increased preference by firms and industries for the Time-of-Use (ToU) tariff that was introduced seven years ago, offering large consumers a discount of 50 percent for the use of electricity during off-peak hours.
The tariff, which sees consumers pay as low as Sh6.06 per unit of electricity based on consumption, is meant to encourage productive use of power and increased manufacturing.
“TOU beneficiaries cumulatively saved Sh947.3 million during the review period. The savings achieved in this period increased by Sh398.3 million compared to the first half of the year,” Epra says.
Firms and industries enjoy the ToU tariff during off-peak hours that occur between 10pm and 6am, a period when the country is forced to curtail electricity to ensure a stable grid.
Electricity curtailment refers to any action meant to reduce the amount of energy generated within a system to ensure there is a balance between demand and supply
Manufacturers and firms had for years complained of expensive electricity that significantly increased operational costs, reducing the competitiveness of their products in the global market. They booked the biggest savings on their power bills in July last year at Sh204.4 million, as the special tariff eased the pressure of high-power bills at a time when other categories of consumers grappled with rising electricity bills.
Electricity bills went up from April last year by an average of between 15 percent to 20 percent on the implementation of new retail tariffs. The firms consumed 3,549.66 Gigawatt-hours (GWh) of power in the six months.
ToU was rolled out in December 2017 to spur a 24-hour economy where manufacturers who increase production at night benefit from lower tariffs that in turn reduce their power bills and boost the competitiveness of their products.
Under the retail tariffs gazetted in April last year, the lowest cost of electricity under the ToU is Sh6.06 per unit, while the highest is Sh7.42 per unit. The unit per cost is pegged on the amount of electricity consumed.
Besides the ToU on manufactures, the government is pushing to grow consumption of power at peak hours and ease curtailment of electricity.
