Power prices drop in March as debt burden dims relief
Kenya Power Managing Director and CEO Joseph Siror during a press briefing to present the Company’s Operational Performance Report for Q2 FY 2023-2024 at Stima Plaza, Nairobi on February 20, 2024. PHOTO | LUCY WANJIRU | NMG
Consumer prices of electricity have dropped by an average Sh1 a unit for March, marking a second consecutive month of cost reliefs although paying producers cut more gains.
This is after the Energy and Petroleum Regulatory Authority (Epra) lowered the fuel energy cost to Sh3.64 per kilowatt-hour (kWh) for this month from Sh4.14 in February on reduced uptake of expensive thermal power.
Kenya Power increased the purchase of cheaper hydropower from 253.4 million units in January to 260.88 million units in February, easing pressure on bills.
“Pursuant to Clause 1 of Part III of the Schedule of Tariffs 2023, notice is given that all prices for electrical energy specified in Part II of the said Schedule will be liable to a fuel energy cost charge of plus 364 Kenya cents per kWh for all meter readings to be taken in March 2024,” said Epra director-general Daniel Kiptoo in a gazette notice.
Epra data shows that foreign exchange rate fluctuation adjustment (Ferfa), which reflects the cost of servicing foreign currency loans used to finance power generation, went up to Sh3.68 for March from Sh3.22 per unit in February.
This is despite the strengthening of the Kenyan shilling against the US dollar last month to trade at an average Sh159.7 against the dollar in January. It went up to an average Sh152.26 last month.
The increase in forex costs was caused by improved payments to power generators. These payments have been accumulating for months due to a shortage of foreign currency.
Kenya Power Managing Director Joseph Siror on Monday said that consumers would enjoy cheaper prices in the coming months as the utility settles the outstanding payments.
“For long, foreign currency was not available, thus the increased payments which ultimately will level out as we clear the backlog of payments,” Dr Siror said.
The March electricity prices mark the second successive drop in power prices following the reduction of prices of the commodity by an average of 9.3 percent last month.
According to data from the Kenya National Bureau of Statistics (KNBS), 200kWh of electricity cost Sh6,753.47 last month down from Sh7,447 in January.
However, power prices remain high compared to a similar period last year due to new tariffs that were effected by Epra in April last year.
According to KNBS data, electricity prices were higher by an average of 32.1 percent last month compared to February last year.
For instance, 50kWh was selling at Sh985.01 in February last year, which went up significantly to Sh1,406 last month.
