Higher fuel and foreign exchange costs expected to push up electricity bills this month

The cost of electricity will also rise this month as fuel and foreign exchange costs increase.

Kenyans will face higher electricity prices after the Energy and Petroleum Regulatory Authority (Epra) on Friday raised two charges. The fuel cost charge (FCC), where power industry players are compensated for the cost of buying heavy fuel oil used by thermal power plants to generate electricity, has increased to Sh3.48 per unit in August from Sh3.25 in July.

“Notice is hereby given that all electricity prices specified in Part II of the 2023 tariff schedule are subject to a fuel energy cost charge of 348 Kenyan cents per kilowatt-hour for all meter readings in August 2024,” the Kenya Electricity Authority (Epra) said in a notice on Friday.

Epra also promotes foreign exchange Adjustment for interest rate fluctuationsTo cushion the impact of the weak local shilling for power sector players, electricity prices were raised to Sh1.17 per unit in August from 98 cents per unit in July.

Electricity prices have generally been on a downward trend this year. In January this year, the electricity price for middle-income households rose to an all-time high of 36.81 shillings per unit, but has now dropped to 30.13 shillings per unit.

The drop in power costs comes as heavy rains this year have caused water levels at hydroelectric power stations to rise, greatly increasing the amount of electricity produced by cheap hydroelectric generators while reducing reliance on thermal power plants, which use heavy fuel oil to generate electricity and are the most expensive to deliver to the national grid.

Another factor is The fall in electricity costs has led to a stronger shilling, which has risen against the dollar since January from a low of 160 shillings in December to below 129 shillings currently.

In July, households using 200 units of electricity paid Sh5,663, 9% lower than the Sh6,250.90 they paid in June this year. Consumers in the subsidy range of 30 to 100 units of electricity paid Sh1,262.18 (50 units) in July, down 4.4% from Sh1,320.73 in June.