November power prices fall on lower fuel, forex charge

Currencies

November power prices fall on lower fuel, forex charge


token

A prepaid electricity token machine provided by Kenya Power and Lightning Company. FILE PHOTO | NMG

Domestic electricity bills have dropped 3.6 per cent this month on a decrease in variable charges including fuel cost charge (FCC) and foreign exchange fluctuation adjustment (FERFA).

An analysis of power bills by the Business Daily shows those consuming 50 kilowatt-hours (kWh) will settle Sh1,237.2 this month, down from Sh1,283.3 in October.

Households with a consumption of 100 kWh are paying Sh2,474.3 down from Sh2,566 last month.

Consumers will part with Sh3,711.6 for 150 kWh this month from Sh3,849.8 in October.

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Other consumers will cough up Sh4,948.7 in November for 200 kWh, a drop from Sh5.133 in the previous month.

Consumers are paying less for electricity this month after the Energy and Petroleum Regulatory Authority (Epra) reduced the FCC and FERFA resulting in a reprieve for consumers.

The fuel cost charge decreased by 10.3 per cent from Sh7.09 per kWh last month to Sh6.36 per kWh and the foreign exchange effect decreased slightly from Sh1.48 per kWh to Sh1.41 in the period under review.

This is the first decline since August following two subsequent price increases after the new administration scrapped fuel subsidies.

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The former president had promised a 30 per cent cut on electricity tariffs whose first cut of 15 per cent was implemented in January to cushion consumers against harsh economic headwinds.

The tariff cut was reversed in September, sending power bills up compounded by a rise in variable charges.

Tariffs are determined based on the prescribed feed-in tariff by the government or through open and transparent procurement.

The foreign adjustment cushions the power sector players from the shilling’s volatility when repaying loans, since most of them are denominated in United State dollars and when importing equipment and other materials inaccessible locally.

Electricity prices remained unchanged between January and August.

From January through August, 50 kWh was going for Sh1,093, Sh2,186 for 100 kWh, Sh3,279 for 150 kWh, and Sh4,373 for 200 kWh.

Electricity consumption in Kenya fell in September as users began feeling the pinch of higher energy prices on discontinued subsidies and a weakening shilling.

Electricity use is one of the significant barometers of how the economy is performing, with lower uptake signalling reduced economic activities such as manufacturing.

The marginal decrease in the foreign exchange component of the electricity comes amid a weakening shilling against the greenback.

Kenya’s inflation hit a five-year high in October amid a continued increase in the cost of food, fuel, and housing.

Inflation came in at 9.6 per cent in October, which was up from September’s 9.2 per cent. October’s result was the highest inflation rate since May 2017.

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