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Economy

707 large firms enjoy discounted night electricity tariffs

A Kenya power technician at work. Large manufacturers are enjoying discounted night-time tariffs. FILE PHOTO | NMG
A Kenya power technician at work. Large manufacturers are enjoying discounted night-time tariffs. FILE PHOTO | NMG 

Only 707 large businesses and manufacturers are enjoying discounted night-time tariffs introduced on December 1 following strict eligibility criteria tied to the firm’s efficiency levels.

Kenya Power #ticker:KPLC records indicate Nairobi leads the pack with 238 companies enjoying the cheaper night tariffs charged at half market rates from 10pm to 6am when electricity consumption is low.

The Coast comes in second with 128 large power users enjoying the 50 per cent discount, while a third of the firms are in Central Rift (80 firms) and the bottom is South Nyanza (16 firms).

In the night-time tariffs, commercial users who are metered at between 450 volts and 11 kilovolts (kV) pay Sh4.60 per unit, down from Sh9.20, a 50 per cent discount.

Consumers metered at above 11 kV pay an energy charge of Sh4 per unit, from Sh8, while the rate for those consuming above 33 kV has been halved to Sh3.75.

But for firms to enjoy the cut tariffs, they have to exceed their normal power consumption, a government’s goal to encourage activity and rev up the productive use of electricity.

If a firm, for instance, has been consuming 1,000-kilowatt hours (kWh) per day, it has to exceed the 1,000 units, with the additional units attracting the 50 per cent discount.

Manufacturers that operate at 100 per cent capacity daily, with no room to increase operations and lift their power intake, such as most cement makers, enjoy only a five per cent discount, according to Kenya Power.

The conditions are aimed at ensuring Kenya Power’s revenues are not hurt.

The night tariff had been introduced in 1999/2000 but squeezed Kenya Power’s margins since all large consumers shifted to the off-peak times with the electricity distributor incurring heavy losses.

It abandoned the model. Kenya’s commercial and industrial tariffs stand at an average of Sh15 per unit, which is seen as uncompetitive compared with other African nations such as Ethiopia, South Africa and Egypt.

The government has been trying to boost investments in the industrial sector with modest success.

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