Kenyans face steep electricity bills in the wake of a push by Parliament to have consumers pay higher charges to enable Kenya Power to recover billions of shillings spent on the rural electrification projects.
The National Assembly Committee on Energy wants the Energy and Petroleum Regulatory Authority (Epra) to introduce, through the monthly bills, pass-through costs from July 2026 to help Kenya Power recover the billions it spends on building and maintaining the rural electricity grid.
The Treasury is expected to reimburse Kenya Power for grid expenses in a rural setting where the uptake of electricity is not enough to generate a return for the listed utility.
But the Treasury has failed to reimburse Kenya Power, with the unpaid bill having piled to Sh29.9 billion as at June 2024 and expected to rise as the State deepens connections in rural areas.
Kenya Power disclosures show that rural homes spent an average of Sh217 per month, which is nearly a quarter of the national average of Sh830.27 for households, a scenario that has increasingly made it hard for the company to recoup its investment in the rural electrification projects.
Now, the National Assembly Committee on Energy wants Epra to compel consumers to foot the bill in their monthly power bills amid the Treasury’s inability to clear the billions of shillings promptly.
“Within six months upon adoption of this report, Epra institutes a review of the pass-through costs to introduce a recovery mechanism for the operating deficits for RES [rural electrification projects] and that in the next Tariff Control Period, the same be factored in the Base Tariff,” the committee says as part of conditions for lifting of the freeze on new power purchase agreements (PPAs).
This pass-through cost will be contained in the base tariff (cost of a unit of electricity) and will increase the base tariff per kilowatt-hour of electricity, setting the stage for Kenyans to pay more for power. Epra is expected to gazette the new base tariffs that will be in force for three years from July 2026.
The energy regulator on Tuesday raised concerns over the committee’s directive, saying that it would be unfair to consumers and that a decision can only be taken upon getting advice from the Attorney General -- the chief legal adviser of the government.
“If the government told Kenya Power to undertake RES with the commitment to reimburse expenses, then we are asking ourselves is it fair to force consumers to pay this money?” Daniel Kiptoo, the director-general of Epra, said last evening.
“We also need to get advice from the AG on whether this directive by the committee is binding, given that we have separation of powers between the Executive and Legislature.”
Kenya Power continues to grapple with the RES debt, with the Treasury failing to settle some Sh19 billion as a partial payment that had been approved by the Cabinet.
Base tariffs are the single-biggest component of a power bill, underlining why Kenyans could pay more for electricity if the MPs’ plan is adopted.
Consumers currently pay a pass-through cost to cater for the RES. The levy, which is known as the rural electrification levy, is one of the eight charges that when added to the base tariff (consumption charge per kilowatt-hour of power) make up the electricity bills.
The others are the fuel cost charge, the forex fee, the inflation adjustment charge, Epra levy, water resources authority levy, the energy sector charge and a Value Added Tax, which is charged at the rate of 16 percent of the bill.
Electricity prices have marginally risen over the past year, mainly due to the impact of increased use of thermal power. Kenya Power bought 1,247.93 billion kWh of thermal power in the year ended June 2025 compared to 1,127.11 billion kWh a year ago.
For example, consumers paid an average of Sh5,764.15 for 200 kilowatt-hours (kWh) last month, compared to Sh5,728.40 a year ago. It remains to be seen if Epra will implement the MPs’ directive, given that the Ministry of Energy recently warned against any new levies that could trigger steep electricity prices and hurt consumers.
RES was started in 1973 to light up homes and businesses in rural parts of the country. Under the project, Kenya Power operates and maintains the RES assets, with the Treasury reimbursing the firm.
Kenya Power disclosed that the Treasury has only reimbursed a paltry Sh810 million out of the Sh30.7 billion that was owed to the utility under the RES project prior to the partial reimbursement.
The parliamentary committee wants Kenya Power to be delinked from all non-commercial projects in the electricity sector to cut the firm’s exposure and shore up its bottom line.
The committee directed the Ministry of Energy to transfer the projects that include RES, the Last Mile connectivity project and the off-grid solar access project for underserved counties to be handled by the Rural Electrification Rural Electrification and Renewable Energy Corporation.
It is the second time MPs are pushing for the introduction of a levy to foot the costs of a project.
The previous committee had directed Epra to introduce the Street Lighting Infrastructural Support Levy (SLISL) by June this year to help fund the installation of street lights in the 47 counties without burdening Kenya Power.
Epra did not comply with the directive, even as Kenya Power backed this levy, saying it would significantly help ease the negative impact of the street lighting project on its books.
Kenya Power is grappling with a debt of at least Sh800 million for the street lighting project, further hurting efforts by the firm to cut its debt on electricity sales.
