More pain for consumers as Epra raises price of electricity

Electricity consumed in March would be liable to a foreign exchange fluctuation adjustment of Sh2.16 per kWh. [File, Standard]

The cost of electricity will go up sharply this month as the country relies more on expensive thermal electricity generators due to the drought as well as the further weakening of the shilling against the US dollar.

The fuel and foreign exchange adjustment costs have risen to record highs for power that will be consumed in the course of March.

This will add to the misery of Kenyans who are grappling with high cost of basic items.

Fuel cost charge (FCC) will go up by 26 per cent to Sh8.30 per unit of electricity that Kenyans will consume this month from Sh6.59 per unit in February, according to new rates published by the Energy and Petroleum Regulatory Authority (Epra) on Friday.

The foreign exchange rate fluctuation adjustment will increase to Sh2.16 per unit, which is a 17 per cent increase from Sh1.85 per unit last month.

This is even as consumers await the completion of Epra's review of Kenya Power's tariff application that is expected to result in a further increase in power costs later this month.

"Pursuant to Clause I of Part III of the Schedule of Tariffs 2018, notice is given that all price for electrical energy... will be liable to a fuel charge of plus 830 Kenya cents (Sh8.30) per kilowatt hour (kWh) for all metre readings taken in March 2023," said Epra in a Kenya Gazette notice.

It said electricity consumed this month would also be liable to a foreign exchange fluctuation adjustment of 216.29 cents (Sh2.16) per kWh.

The forex adjustment is a pass-through cost borne by consumers to cushion power sector players from the impact of a weak shilling when repaying loans, many of which are issued in foreign currency, or importing equipment critical to the production and supply of electricity.

The shilling has sharply weakened to exchange at 128.89 to the dollar on Friday, according to the Central Bank of Kenya - although banks and forex bureaus are selling at much higher rates.

FCC stood at Sh6.59 per unit in February, having started to ease from a high of Sh7.18 per unit in January.