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Economy

KenGen raises production of cheaper hydropower as dams fill up

 Masinga Dam spill over in Machakos County on April 19, 2013. FILE PHOTO | NMG
Masinga Dam spill over in Machakos County on April 19, 2013. FILE PHOTO | NMG 

Power producer KenGen #ticker:KEGN yesterday said it has increased production of cheap hydropower following three weeks of heavy rains that have filled up the dams, setting the stage for an easing of electricity costs that steadily rose six months in a row.

This sets the stage for lower power bills, which have been rising for six months in a row.

KenGen, which supplies more than 60 per cent of power used in Kenya, had deeply cut hydropower production as dam water levels dipped after a prolonged drought last year.

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Alternative power

The drop saw electricity distributor Kenya Power turn to independent power producers for increased supply of expensive diesel fired electricity as an alternative, triggering a spike in consumer power bills.

“We will step up hydro generation in the months ahead but ensure we conserve available water to last until the short rains later in the year,” KenGen managing director Rebecca Miano said in a statement.

The weatherman forecasts continued downpour through the end of the month with some parts of the country expected to record heavy showers.

The rains have seen Masinga hydroelectric dam, which was on the verge of closure last year due to low water levels, nearly filling up, according to KenGen.

Prime reservoir

The dam, located on the border of Machakos and Embu, is the prime water reservoir for Kenya’s main hydropower circuit, the Seven Forks hydropower complex on Tana River and has a series of major hydroelectric power plants.

Hydropower is the cheapest source in Kenya’s power mix, which comprises geothermal and thermal power.

Its increased generation signals a cut in power bills in coming months.

Power bills had risen for six months, hitting historic peaks due to sharp increases in fuel cost levy, squeezing budgets of consumers.

The fuel levy is linked to the amount of power produced by diesel generators and supplied to consumers and often shoots up as a result of cuts in hydropower generation.

Fuel surcharge

The Energy Regulatory Commission (ERC) adjusts the fuel surcharge in power bills every month, currently standing at a 42-month high of Sh5.35 per kilowatt hour (kWh) of electricity consumed in April.

Official data shows that power bills for homes that consume 200-kilowatt hours (kWh) per month, mostly middle class, jumped five per cent last month to a new high of Sh4,262 — one the fastest monthly growth among basic household items.

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