Electricity consumers will have to dig deeper into their pockets to pay an additional Sh817.6 million in power bills this month, which will be used to compensate thermal power producers following a rise in the price of fuel.
The price changes mean that for a small household that uses 200 units every month, which has been selling for Sh3,596 for their daily needs will now pay Sh160 more this month.
Nearly 20 per cent of this bill, or Sh726, will go to compensate thermal power generators through the fuel energy charge, while Sh502.55 is Value Added Tax (VAT) and just Sh2,037.5 for the actual consumption.
However, the pain will be amplified for those who consume more, including businesses and manufacturers, who use thousands of units monthly.
A small business that consumes 1,000 units a month will cough up an extra Sh800.The Energy and Petroleum Regulatory Authority (Epra), in its June review last week, raised the fuel energy charge by 24 per cent to Sh3.63 — the highest level since May 2019, up from Sh2.92 in May for each unit (kilowatt-hour) of electricity that consumers will buy this month.
Foreign exchange
Epra also slightly raised the foreign exchange rate fluctuation adjustment charge by 10 cents to align the amount of money that Kenya Power will pay to energy producers with this fluctuation, as the contracts between the firm and the generators are denominated in US dollars and Euros.
“Pursuant to Clause 1 of Part III of the Schedule of Tariffs 2018, notice is given that all prices for electrical energy specified in Part II of the said schedule will be liable to a fuel energy cost charge of plus 363 Kenya cents per kWh for all meter readings to be taken in June 2021,” Epra said.
Inhibit productivity
Lifting of various Covid-19 containment measures and the gradual uptick of economic activities in recent months has seen power use rise steadily to 1,058.69 million kWh in March, dip slightly to 977.06 million kWh in April, before rebounding to 1,029.56 million kWh in May.
Roofing materials maker Eric Koguya says the rise in power cost will discourage businesses from venturing into energy-intensive investments such as manufacturing to avoid the rising cost of operations.
“High electricity bills are an increasing headache not just for large businesses, but are also hitting ordinary and comparatively smaller consumers such as kinyozi (barbers), laundry and welders. As a result, it will eventually inhibit productivity as people will look to cut down on their electricity costs,” he said. BY DAILY NATION