State power provider, Kenya Power and Lighting Company has made an application to increase electricity bills by 20 percent.
The listed utility firm is currently waiting for an okay from the Energy and Petroleum Regulatory Authority (EPRA) — the electricity sector regulator — to raise tariffs to boost its profitability.
Kenya Power wants to increase prices of the Kenyans who consume less than 100 Kilowatts, to Sh12.50 a unit, which is a significant increase from the current Sh10.
Should the Energy regulator accept the proposal, the electricity bills of homes that consume 50 units monthly jump to Sh 961 from the current Sh816.
Households consuming 200 units will get a bill of Sh5,477 from the current Sh4,612, reflecting a 18.8 percent rise, given their consumption charge will rise to Sh19.53 per unit from the current Sh15.80 in the event that the regulator approves the proposed tariff.
According to the Business Daily, last year, EPRA reduced the retail prices of electricity after an order from President Uhuru Kenyatta in the wake of widespread complaints from domestic customers and small businesses over a costly tariff introduced last July.
The tariff almost doubled the monthly bills for higher-income households, triggering complaints that forced EPRA to cut the tariff from November 2018 to July 2019 to Sh10 per kilowatt-hour from Sh15.80 for customers who use below 100 kilowatts per month.
The expiry of the temporary tariffs is what is emboldening Kenya Power to push for a review of the tariffs upwards and reverse its falling earnings, which has seen it issue a profit warning this year—the second alert in a row.
“Kenya Power assumes that the Retail Tariffs Application to adjust non-fuel base tariffs shall be approved in its entirety as the company may face operational challenges if a review is not granted,’’ Kenya Power wrote to the regulator in the application. “The company may become financially unviable since its required continued improvement in service needs substantial investment.”
The law provides that electricity tariffs be reviewed every three years, but the timetable has been erratic as the regulator has often delayed or amended the rates, partly due to the government seeking to ease inflationary pressure on households and industries.