Kenya Power to collect Sh31bn from new Electricity Tarrifs

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Kenya Power has revealed that it will raise up to Sh31.4 billion more from consumers under the proposed new electricity tariff set to kick in from April.

Acting Managing Director of Kenya Power, Geoffrey Muli made the disclosures on Monday, highlighting the financial lift of the new tariff to fund the upgrading of the ageing distribution system and critical projects of the other State-owned firms in the generation and transmission of power.

The utility firm submitted the proposed tariff to the Energy and Petroleum Regulatory Authority (EPRA), setting the stage for the first upward review of retail power prices since 2018.

Muli explained that the additional billions are based on the Sh157 billion in revenue that Kenya Power collected in the 2021/22 financial year.

“We are expecting to get between 15 percent and 20 percent more in revenue from the Sh157 billion that we collected last year if the new tariffs are approved,” Muli said.

The revenue increment is based on assumptions that surcharge levies in power bills like fuel and forex adjustments will remain at the levels recorded in January.

Besides helping Kenya Power to upgrade its ageing transmission line, the billions of shillings will also inject more funds for capital and operations to the Kenya Electricity Transmission Company (Ketraco) and Rural Electrification Company (Rerec).

Kenya Power says that 64 percent of the revenue collected is used to pay Independent Power Producers and the Kenya Electricity Generating Company for electricity supplies, two percent goes to Ketraco and oneper centt to REREC.

New prices are likely to derail Kenya’s quest to make energy costs competitive compared with other African nations like Ethiopia, South Africa and Egypt.

Kenya Power noted that the higher tariffs are justified because the present electricity prices lapsed in 2019.