The cost of electricity will drop this month on reduced use of thermal power amid concerns from the energy regulator that Kenya was not doing enough to cut reliance on expensive diesel generators.
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| A Technician Inspecting A Meter Board |
Data from the Energy Regulatory Commission shows fuel cost adjustment, which is linked to amount of power generated from expensive fuel-driven generators, dropped to Sh2.81 per kWh for bills to be settled in September and October from last month’s Sh3.11.
The foreign exchange fluctuation adjustment cost, which is also a variable item on the bill, dropped to Sh0.93 per kWh from Sh1.49kWh last month.
This will cut power bills by Sh0.76 and make businesses and households to save about Sh600 million compared to their previous bills.
The ERC had faulted the heavy uptake of thermal electricity and directed Kenya Power to revert to a mix that will stop the cost surge.
Kenya injected 280 megawatts of additional geothermal power to the national grid between August and December last year.
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| Kenya Power Personnel |
Increased uptake of the cheaper geothermal power on the national grid saw the ERC pledge in April to maintain the fuel surcharge at between Sh2 and Sh3 per unit to stabilise electricity prices of domestic consumers and enable manufacturers to monitor their cost of production.
But the fuel levy last month increased for the second month in a row, hitting a nine-month high of Sh3.11 per unit.
But the fuel levy last month increased for the second month in a row, hitting a nine-month high of Sh3.11 per unit.
“Cheaper hydro-power generation has not been aggressively pursued despite fairly good water levels,” the ERC told Kenya Power in a letter last month, adding that it will be watching the power distributor closely “to avoid defaulting on our commitment to keep power costs down.”
Last month, thermal accounted for 18.6 per cent of electricity bought by homes and businesses, up from 10 per cent in December.
Last month, thermal accounted for 18.6 per cent of electricity bought by homes and businesses, up from 10 per cent in December.
Reducing the cost of energy has been a key plank of President Uhuru Kenyatta’s economic agenda that is aimed at making locally produced goods competitive as well as slowing down inflation.
Businesses have in recent years complained that expensive power makes Kenya’s products noncompetitive.
Though the additional cheaper geothermal cut electricity costs by nearly a quarter since last August, homes have seen little changes when the comparison is stretched to more than 18 months ago.
Businesses have in recent years complained that expensive power makes Kenya’s products noncompetitive.
Though the additional cheaper geothermal cut electricity costs by nearly a quarter since last August, homes have seen little changes when the comparison is stretched to more than 18 months ago.
Courtesy of the Business Daily 06.10.2015
