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Electricity bills set to go down

December 5th, 2015 1 min read


The cost of electricity is set to go down marginally for the first time since July because of a strengthening shilling, falling fuel prices and El Niño rains, which have reduced dependence on diesel generators.

In a gazette notice published by the Energy Regulatory Commision (ERC), the forex exchange fluctuation adjustment, a critical component of a power bill, has been reduced by 6 per cent to Sh1 per kilowatt hour (kWh) while the fuel cost charge remains the same at Sh2.51 per kWh.

“There has been a general increase in the dam levels as a result of the ongoing rains plus the shilling has been steadily stabilizing against the dollar so naturally we have to pass on these benefits to Kenyans,” ERC director general Joseph Ng’ang’a said yesterday.

Electricity generator Kengen this week said all its Seven Forks dams have reached spilling levels, causing Kenya Power to purchase more electricity from it instead of from Independent Power Producers (IPPs).


Currently, water generated hydropower contributes 38.1 per cent of Kenya’s total power mix while diesel-powered plants and wind contribute 14.8 and 0.4 per cent.

According to the gazette notice, a total of 298 million kWh of electricity were consumed in October, out of which 104 million was from 20 active thermal producers. Kenya Power has 24 long-term contracts with such IPPs.

A “take or pay” tariff agreement ensures IPPs are paid even when not producing electricity.

This cost of purchasing power from these thermal producers is transferred to a customer’s bill as fuel cost charge.
It is tied to the strength of the shilling as Kenya is an oil importer.