Why El Niño rains failed to lower electricity bills


Kenya Power Offices along Aga Khan Walk as pictured on April 23, 2023. PHOTO | LUCY WANJIRU | NMG

Households and businesses experienced a marginal relief in power bills despite the State halving expensive thermal power to grid and raising by more than a third generation of hydro-power, fresh official numbers indicate.

The share of electricity tapped from diesel-run power plants dropped to a 30-month low last November on El Niño rainfall, boosting generation from hydro-power to highest levels in 22 months, data collated by the Kenya National Bureau of Statistics (KNBS) shows. 

The volume of electricity tapped from diesel-run generators in the review month plunged 51.68 percent to 67.93 gigawatt hours (Gwh) compared with October’s 140.57 Gwh, according to the KNBS data. A Gwh is equivalent to a billion units of power.

This came at a time heavy rainfall — linked to the El Niño phenomenon — peaked, raising water levels in the country's Seven Forks hydro-electric dams on Tana River.

The water levels in the dams had fallen significantly due to a biting drought in 2022, estimated to be the worst in 40 decades, slashing hydro-power supply to the grid to the lowest levels in nearly one and a half decades in February last year at 112.91 Gwh.

The first monthly data following the onset of heavy rainfall, however, shows hydro-power climbed 40.09 percent in November to 287.58Gwh, the highest levels since January 2022 when it was at 320.30Gwh.

Increased generation of hydro-power amid plunging output from diesel-powered plants is expected to ease the cost pressure of electricity bills on homes and companies.

“Due to the rains, our dams from Kiambere to Masinga are getting full. We will dispatch more power that will be cheaper,” Energy Cabinet Secretary Davis Chirchir said on December 11. “We should see a sustained drop in bills going forward mainly due to a fall in the pass-through costs, in this case, the fuel cost charge."

The data shows the benefits to consumers have been marginal. 

Mercy Kanyi, a resident of Tassia in Nairobi’s Eastlands, has a monthly budget of Sh1,000 for power.  Ms Kanyi’s prepaid power purchases, based on electronic receipts, shows her tokens increased from 35.50 kilowatt-hour (kWh) in October to 35.92 kWh (units) in November and before falling to 35.49 units in December.

This means the cost of power for her eased a measly 1.18 percent between October and November but rose again 1.20 percent in December. The costs are inclusive of taxes, levies and other charges that take up about 40 percent of the cost. 

“If there’s something in my house that I watch closely how it is used, it is electricity,” says the single mother of two.

For a middle-class household that consumes 200kWh a month, the bill dropped 0.98 percent in November to Sh6,620.68 compared with October, but rose 1.0 percent to Sh6,686.56 in December, according to data collated by the KNBS.

Power prices have risen further this month by up to 16.5 percent for domestic consumers despite the rains. 

The government, whose first full month in power was October 2022, in December dropped the 15 percent cushion on power bills by the previous administration.

The Energy and Petroleum Regulatory Authority (Epra) followed that up with an increase in base electricity costs from April 2023, the first review since 2018.

The review raised the base tariff for households consuming more than 100kWh by 13.72 percent to Sh31.75 per unit, while the charge for those buying 30-100 units went up 18.69 percent to Sh26.10 per unit.

Besides the base charges, the power bills are also largely impacted by surcharges that take up about 40 percent. These are largely fuel cost charges (FCC) remitted to power producers who burn diesel to generate electricity and the foreign exchange rate fluctuation adjustment (Ferfa) which helps Kenya Power to cover repayment of foreign loans and power purchase costs in tandem with shilling-dollar exchange rate.

The Epra raised FCC in November by 28.74 percent to Sh6.36 per unit from Sh4.94 in October at a time the thermal share to the grid dropped to a 30-month low. Ferfa, on the other hand, was cut 31.4 percent to Sh1.41 per kWh from Sh2.05 in October.

Kenya Power, the near monopoly electricity distributor, dropped the breakdown of electricity bills for prepaid customers early 2023, lowering transparency in pricing.

The reduced tapping of dirty thermal power will boost Kenya’s plan to transition power generation to 100 percent clean and affordable sources by 2030.

Electricity is also sold in US dollars, meaning Kenyan households and businesses spend more whenever the shilling depreciates.

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