Kenya Power recovers Sh548m Uhuru tariff cut deficit from February bills

Daniel Kiptoo Bargoria

Energy and Petroleum Regulatory Authority (Epra) boss Daniel Kiptoo. 

Photo credit: File | Nation Media Group

The Energy and Petroleum Regulatory Authority (Epra) has allowed Kenya Power to recover the Sh548 million it lost through former President Uhuru Kenyatta’s tariff cut from this month’s electricity bills.

The Epra last year allowed the utility to recover Sh6.5 billion, which it lost in the 15 percent tariff cut by deducting from the consumer bills.

The deductions, which will be made through 12 instalments, were first effected last month.

“We have allowed the recovery of revenue deficit arising from the extension of discounted user tariffs between January -March 2023 of Sh548 million being the second of 12 instalments,” said the Epra in a disclosure.

Mr Kenyatta enforced the tariff cut in January 2022 to lower the cost of electricity. The cut was to last until December 2022 and cost the utility revenue amounting to Sh26 billion.

However, President William Ruto extended the tariff cut by three more months to March 2023, which cost the company an additional Sh6.5 billion.

To reverse the revenue loss, the Epra last year allowed Kenya Power to recover the money from bills this year in a staggered manner.

The Epra has said February’s power prices will come down significantly by Sh3.44 per unit for all consumer categories. However, the recovery of the Sh548 million from bills has prevented the prices from dropping by an even larger margin.

“[February bills will reduce due to] significant reduction in the forex adjustment on account of a decrease in the total foreign currency exchange payments made in January 2023,” Epra director-general Daniel Kiptoo told the Business Daily on Thursday.

The initial revenue deficit of Sh26 billion was shared among energy sector parastatals, while the government also reimbursed the utility a share of the lost revenue.

Kenya Electricity Generating Company (KenGen) agreed to give Kenya Power a discount of Sh3.5 billion, the Kenya Electricity Transmission Company agreed to a discount of Sh800 million and the Geothermal Development Company agreed to shoulder Sh500 million.

The revenue loss from the tariff cut and foreign exchange losses pulled the firm into a net loss of Sh3.19 billion in the financial year to June 2023.

KenGen has reported a bigger generation of cheaper hydropower on filled-up dams, promising lower electricity bills for consumers.

“We are happy to report that we are receiving very good inflows from the Mount Kenya and Aberdares catchment areas which has led to high water levels at our dams,” said CEO Peter Njenga. He added, “This will see Kenyans reap the full benefit of cheaper electricity.”

The firm said that Masinga Dam, which is the country’s largest dam, has filled up due to a high influx of water from the Mt Kenya region.

It said the five dams in the Seven Forks cascade – namely Masinga, Kamburu, Gitaru, Kindaruma, and Kiambere – have filled up sufficiently, enabling more hydropower to be generated.

KenGen Managing Director Peter Njenga said that dams in the Seven Forks Scheme have filled to the highest level in recent times.

This has led to a significant increase in the output of hydropower, which is the cheapest source of electricity in Kenya, said the firm.

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