Cost burden hits home after Kenya Power starts applying new tariffs on pre-paid customers buying tokens beginning August 1
The pain of increased electricity costs started in earnest Thursday after Kenya Power began using the newly announced tariffs for its August billings.
Thousands of pre-paid power consumers took to Twitter to complain that they are now getting fewer units compared to what they got for similar amounts in July, despite the new billing structure having removed the monthly fixed charge of Sh150.
The inflation of bills mainly affected those buying between 11 and 200 units — the majority of middle class users.
The Energy Regulatory Commission (ERC) had on Monday announced that the new tariffs are effective from August 1 for prepaid consumers and would reflect in post-paid customers’ July bills.
On Thursday, pre-paid customers purchasing electricity for Sh3,000 received 135.2 units compared to the 151.4 units for the same amount on July 1.
A user, who bought Sh1,000 worth of power tokens on July 21, got 63.4 units compared to 45.1 units.
Another user’s receipts showed 63.1 units for Sh1,400 on August 1, compared to 79.9 units for a similar amount in June.
Manufacturers also complained of higher billings with the new tariffs.
The Kenya Association of Manufacturers (KAM) chairman, Sachen Gudka, said on Wednesday that the overall cost of electricity was expected to go up by about 18 per cent following the tariff changes.
Such an increase is expected to hurt the competitiveness of Kenya-made products in the regional and global markets.
KAM energy services engineer David Njugi told the Business Daily that the rise in basic costs per unit for all the categories of commercial and industrial consumers effectively amounts to a hike in costs, because the cut in fuel levy was already anticipated after going up sharply last year to compensate for the increase of thermal power on the national grid.
“It rose to Sh4.6 last September because the government needed to recover the fuel levy it failed to collect during the drought….and we had been told it would remain at this level up to June this year before dropping back to the previous level of Sh1.88 per unit,” said Mr Njugi.
He added that fuel levy being a variable cost will rise with another spike in thermal power generation, pushing bills higher for all consumers.
For the current bills though, the ERC’s breakdown of expected amounts shows that for some commercial users the total costs would drop by up to 13 per cent, although Mr Njugi said KAM was waiting for its members to receive August bills in order to ascertain the full impact of the new tariffs.
For domestic users, however, those consuming between 11 and 100 units per month will pay more because of the lower threshold for the lifeline tariff, previously charged at Sh2.50 a unit for up to 50 units but is now fixed at Sh12 per unit for the first 10 units bought.
All domestic consumption above 10 units will now be charged at Sh15.80 a unit having previously been graduated at Sh12.75 for 51-1500 units and Sh20.57 per unit above 1,500.
There are 6.8 million electricity consumers on the national grid, 3.4 million or half of who consume 10 or less units every month.
Up to 1.6 million Kenya Power customers consume between 11 and 100 units a month, this being the group that has been hit hardest by the new tariffs. The remaining 1.2 million consume more than 100 units.
A user of 10 units is now paying Sh169 a month, down from the previous Sh278, representing a 39 per cent fall in billings.
Big domestic users consuming more than 500 units are also paying lower bills (four per cent drop) from this month or Sh6,657.
City lawyer Apollo Mboya on Thursday moved to court for orders suspending the new tariff structure on grounds that it is discriminatory for some categories of consumers.
Mr Mboya says that the change in tariffs has increased the cost of electricity for domestic consumers while favouring minority bulk power consumers who use more than 1,500 units per month.
The lawyer further argues that the new tariff is meant to circumvent court orders issued in January restraining Kenya Power and the ERC from charging consumers with inflated and backdated electricity bills to recover Sh10.1 billion that should have been charged as fuel levy last year.