Power bills dip slightly on lower fuel charge
Electricity bills will fall by at least Sh1 per unit this month.
Electricity bills will fall by at least Sh1 per unit this month following drops in the two major components used in determining prices, offering relief to consumers who faced a rise in power prices last month.
The fuel energy charge (FCC) to be applied this month is Sh3.25 per kilowatt hour (kWh), a drop of 8.6 per cent from last month’s rate of Sh3.59 per kWh while the forex adjustment has fallen 44.1 per cent to Sh0.98 per unit from Sh1.76 per kWh in the same period.
This means that domestic customers who use over 100 units of electricity monthly will now get 34.45 units for Sh1,000, a rise from the 33.17 units for a similar amount last month.
Consumers last month faced the first rise in power bills since January in the wake of a rise in the FCC and forex adjustment rates applied to calculate prices.
“End-user tariff will decrease by Sh1.0681 per kilowatt-hour plus 16 per cent Value Added Tax across all categories,” reads a brief from the Energy and Petroleum Regulatory Authority.
Households that consume between 31 to 100 units of power per month will now get 43.47 units for Sh1,000 up from 39.2 units for a similar amount last month.
FCC is collected by Kenya Power to pay power installations that use diesel to generate electricity, while forex adjustment is used to service foreign currency loans that were tapped to build the plants.
This month’s fall in electricity prices will be a major boost to homes and companies battling reduced earnings and sales respectively.
It (drop) is also set to further help ease the cost of living given that power costs are integral in the basket of factors used to determine inflation.
The drop in FCC highlights the impact of the reduced use of thermal power and falling fuel prices.
Increased generation from the country’s dams and higher imports from Ethiopia and Uganda have also been key in helping lower dependence on thermal plants, especially during peak demand.
Heavy rains that started in March significantly boosted hydropower generation, boosting efforts to further trim the share of thermal power in the national electricity mix.
Hydro is the cheapest source of power in Kenya, highlighting why increased production from the dams is key to lowering power bills.
Fuel prices also dropped in the monthly pricing cycle lapsing on July 14th, while the shilling has steadied to exchange at 129.6 units compared to 130.2 at the start of last month.
