Kenya Power has announced that electricity cost in March has risen by KSh1.20 per unit, including taxes, on the backdrop of increased compensation to expensive diesel plants. This pushes the total bills to above KSh1 billion, given the monthly consumption of over 800 million kWh.
This comes after EPRA raised foreign exchange and fuel adjustment surcharges it levies on March electricity bills. The fuel surcharge has increased to KSh3.54 per kilowatt-hour (kWh) from February’s KSh2.61, rising to the highest levels in nineteen months. On the other hand, the foreign exchange fluctuation has increased slightly to KSh0.77 per kWh, from February’s KSh0.66.
The costly fuel surcharge in power bills is linked to increased reliance on diesel-powered generators to produce electricity, as well as the rise in petroleum cost. EPRA has attributed thermal-powered plants’ increased use to reduced generation from cheaper Lake Turkana Wind Power and a breakdown in one of the country’s hydro-electric dams.
The forex levy comprises expenses incurred in foreign currency by power generators such as KenGen, the independent power producers, and Kenya Power.
The KSh1.20 a unit jump in electricity cost is the highest in nearly two years. Kenya Power is now seeking to lower fixed charges in contracts signed with electricity generating companies, a move that will boost its financial performance and lead to reduced electricity cost for consumers.