Relief as power users get refund for third month in row

Electricity consumers will for the third month in a row get a refund following a review of the foreign exchange levy on power bills, offering relief for some domestic customers and small businesses that have enjoyed tariff cuts from November 1.

The Energy Regulatory Commission (ERC) said homes and businesses were due for a refund of Sh0.0179 per kilowatt hour (kWh) after it used a higher dollar rate to compute the foreign exchange levy last month.

Last month, homes and businesses got a refund of Sh0.0768 a kWh and Sh0.013 in September.

The refunds come in a month when the energy watchdog has cut retail electricity prices for some domestic customers and small businesses following complaints over a tariff introduced in July.

The amendment, effective from November 1 to July 2019, lowers the retail price to Sh10 per kilowatt hour from Sh15.80. The lower prices will apply to about 5.7 million customers who use below 100 kilowatt units per month.

The forex levy comprises expenses power generators such as KenGen #ticker:KEGN, independent power producers, as well as Kenya Power #ticker:KPLC incur in foreign currency and is passed on to consumers.

The ERC said its fuel surcharge — which is influenced by the amount of power from diesel-powered generators injected into the national grid — will remain unchanged at Sh2.50.

The refund will further ease pressure on the inflation rate that dropped to 5.53 per cent last month, down from 5.70 per cent the previous month.

Housing, water, electricity, gas and other fuels carry an 18.30 per cent weighting in the basket of goods used to measure inflation.