Kenya Power has announced a steady decline in electricity costs over the past twelve months, attributing this trend to the strengthening of the Kenya Shilling against the US Dollar. The improved exchange rate has lowered pass-through costs, including forex and fuel charges, which significantly influence electricity pricing.
Speaking during an engagement with the Kenya Editors Guild, Kenya Power’s Managing Director and CEO, Eng. Joseph Siror, highlighted how the currency appreciation has eased financial pressures on energy consumers. He also noted that the electricity tariff review in April 2023 set up a three-year framework to progressively lower unit costs, further contributing to reduced energy prices.
“This has added to the gains from the decline in the base energy cost following a review of the electricity tariff in April 2023, which put in place a three-year tariff that provides for a lower cost per unit, starting in July of each of the three years. So far, the base tariff has declined from Ksh19.04 per unit in 2023 to the current Ksh17.94,” said Eng. Siror.
However, Kenya Power has raised concerns over a proposal to impose wayleave charges on power infrastructure, warning that it could reverse the gains made in reducing electricity costs. The company estimates that implementing wayleave fees could increase electricity costs by up to 30%, significantly impacting consumers.
“Kenya Power has over 319,000 kilometres of power lines across all 47 counties. The introduction of wayleaves on power lines will impact retail tariffs. Under the proposal to charge wayleaves on electricity infrastructure at a cost of Ksh200 per meter, this translates into Ksh63.8 billion per year. This is approximately 30% of the energy sector’s revenue requirements which must be recovered from the monthly electricity bills. The overall impact is that electricity will become unaffordable to a majority of Kenyans,” Eng. Siror explained.
Kenya Power has emphasized that Section 223 of the Energy Act 2019 prohibits any public entity from levying charges on public energy infrastructure without regulatory approval. The company urges policymakers to reconsider the wayleave proposal to prevent burdening consumers with higher electricity costs.
