In August, consumers will see a 1.5% increase in their electricity bills due to rising fuel and foreign exchange costs. The Energy and Petroleum Regulatory Authority (Epra) has raised electricity prices in its latest monthly review. Domestic customers will pay an average of 42 cents more per unit of electricity compared to July.
Customers will spend Sh2,877 for 100 units of electricity this month, up from Sh2,832 in July. This change marks August as one of the three months this year, alongside January and June, where the energy regulator has increased power prices. Electricity costs significantly impact the cost of living and doing business in the country.
Epra adjusts three of the eight components of power bills each month. The fuel energy cost (FEC), the foreign exchange rate fluctuation adjustment (Ferfa), and the water resource management authority (Warma) levy. In the recent adjustment, Epra increased the FEC from Sh3.25 to Sh3.48 per unit and the Ferfa from Sh0.98 to Sh1.17 per unit. The Warma levy remains unchanged at two cents per unit.
The base tariff, or consumption charge, is the largest part of power bills and is adjusted every three years. Epra also reviews the inflation adjustment semi-annually to allow Kenya Power to recover inflation-related costs. Other bill components include Value Added Tax (VAT), the Rural Electrification Programme (REP), and the Epra levy.
The rise in FEC suggests that thermal electricity generation increased in July compared to June. This charge compensates power producers using heavy fuel oil. The increase in Ferfa reflects the Kenyan shilling’s depreciation against the US dollar, dropping from about Sh128 to Sh133.
Also read: Miners Urge Joho to Release Mineral Report.
