The National Treasury issued a Sh7.05 billion subsidy to KPLC to allow it to cut electricity bills by a further 15 per cent.
Last year, President Uhuru Kenyatta directed a tariff review to cut power prices by 30 per cent which was to take effect by consumers getting a 15 per cent drop in the cost of power by January this year and another 15 per cent in March.
However, only the first 15 per cent tranche was implemented seeing the cost of buying a unit of electricity drop from Sh 25.9 in December to Sh21.8 in February. The government however maintained they were still in talks with the Independent Power Producers (IPPs) which are owned by powerful institutions like the World Bank.
Currently, the State has opted to offer KPLC subsidies in the quest to lower bills and cushion consumers struggling with rising prices of essential items such as food and ease public anger over the high cost of living.
In a report to lawmakers, the Budget Committee of the National Assembly revealed that the subsidy is set to shield the utility from the effects of the electricity prior to implementation of the second phase.
“To shield KPLC from the effects of the electricity price reduction prior to the implementation of this second phase, the company has been allocated Sh7.05 billion in the proposed budget for 2022/23. There is slow progress in implementing the recommendations of the Presidential Taskforce Report on the review of the power purchasing agreements (PPAs) to reduce electricity prices by 33 percent,” the Budget and Appropriations committee noted.
The Ministry of Energy maintained it is still engaged in extensive negotiation sessions with 77 IPPS which have established and clarified a pathway to the delivery of the next 15 per cent reduction in power tariffs.
The process, which started in March, seeks to contribute to the delivery of the constitutional mandate of the Ministry of Energy which is to provide clean, reliable, sustainable low – cost power.