Kenya Power’s push for higher tariffs ill-advisedFriday January 27 2023
Kenya Power has revived a push to increase electricity prices, this time by up to 78 percent.
Should the Energy and Petroleum Regulatory Authority (Epra) approve the new tariffs, then the utility firm would largely withdraw a monthly subsidy that cushions poor households.
Besides increasing the base tariff, it will cut the threshold for accessing the monthly power subsidy from 100 kilowatt hours to just 30 units.
This will deny millions of households the subsidy they have enjoyed since 2018 as Kenya Power seeks additional resources to upgrade its transmission network and boost profits.
Should it have its way, Kenya Power will raise the unit cost of power for customers who use 30 kilowatts per month and below to Sh28.01, up from the current Sh20.70, reflecting a growth of 35.3 percent.
Those consuming 50 kilowatt hours (kWh) a month, and who bear the biggest brunt of the subsidy withdrawal, will pay Sh36.92 a unit from the current Sh20.70, representing a 78.3 percent jump.
Given, the rising costs of doing business, Kenya Power can justify the higher tariffs.
However, looking in the context of a drop in costs of power due to cleaner energy coming on the grid, and the interest of keeping Kenya competitive as a production hub, such an increment would be ill-advised.
Besides, being a monopoly, Kenya Power should focus on a volume strategy, which means that those who consume more units should pay less to encourage consumption and lift its revenues.
The alternative will just give impetus to the ongoing switch to solar.
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