Higher fuel and forex charges expected to push up electricity bills this month

KPLC Meter token. [File, Standard]

Electricity costs are set to go up this month following upward adjustments in fuel and foreign exchange costs.

The Energy and Petroleum Regulatory Authority (Epra) on Friday increased the twin costs, setting up Kenyans for higher prices of electricity. Fuel Cost Charge (FCC), through which power sector players are reimbursed the cost of acquiring heavy fuel oil used by thermal power plants to produce electricity, has gone up to Sh3.48 per unit that will be consumed in August from Sh3.25 per unit consumed in July.

"Notice is given that all prices for electrical energy specified in Part II of the (Schedule of Tariffs, 2023) will be liable to a fuel energy cost charge of plus 348 Kenya cents per kWh for all meter readings to be taken in August, 2024l," said Epra in a notice Friday.

Epra also pushed the Foreign Exchange Rate Fluctuation Adjustment, which cushions power sector players from a weak local shilling, increase to Sh1.17 per unit in August up from 98 cents in July.

The cost of electricity has generally been on the decline in the course of this year. It had risen to a record of Sh36.81 per unit in January this year for middle-income households but has reduced to Sh30.13 per unit.

The reduction has been due to the heavy rainfalls experienced this year which led to a rise in hydropower dam levels, significantly increasing power generation from the cheap hydro generators while reducing reliance on thermal producers. Hydroelectricity is the cheapest while thermal power, which uses heavy fuel oil to generate electricity, feeds the costliest electricity to the national power grid.

The other factor that saw a reduction in the cost of power has been the strengthening of the shilling which has since January gained from a low of Sh160 in December last year and January to under Sh129 currently to the US dollar.

Households consuming 200 units of power paid Sh5,663 over July, which was nine per cent lower compared to the Sh6,250.90 they paid in June this year. Consumers in the subsidised band, which consumes between 30 and 100 units, paid Sh1,262.18 in July for 50 units a 4.4 per cent drop from Sh1,320.73 in June.