Electricity Prices Expected to Rise in June
Electricity Prices Expected to Rise in June
Electricity Prices Expected to Rise in June
In June, Kenyan households will have to pay an additional 2.8% on average more for power, resulting in yet another increase in expenses.
Due to this increase, consumers who fall under the Domestic Ordinary 2 category and use more than 100 kWh per month will now pay Ksh1,028 for 32.9 units of energy, up Ksh28 from Ksh1,000.
In their most recent monthly review, the Energy and Petroleum Regulatory Authority (Epra) revealed the new rates, noting that the Fuel Energy Charge (FEC) had increased from Ksh3.52 in May to Ksh3.59 per unit.
“Schedule will be liable to a fuel energy cost charge of plus 359 Kenya cents per kWh for all meter readings to be taken in June, 2024,” read part of the Gazette notice.
Kenya Power collects the Fuel Energy Charge (FEC), a pass-through expense, and then sends it to electricity providers who use diesel to generate energy. The most expensive kind of electricity, thermal power, is becoming increasingly necessary, as evidenced by the recent increase in FEC.
Furthermore, the Foreign Exchange Rate Fluctuation Adjustment (Ferfa), which was formerly only 97 cents in May, has been increased to Ksh1.76 per unit by Epra. The costs of servicing foreign currency loans used to generate electricity are covered by this adjustment. Higher payments to Independent Power Producers (IPPs), who are paid in foreign currencies like US dollars and euros, are reflected in the increase.
The spike in electricity costs is the first since January 2024, when Kenya experienced a significant rise in power prices.
Back then, customers across all categories—Domestic Lifeline, Domestic Ordinary 1, and Domestic Ordinary 2—saw increases of 17 per cent, 13 per cent, and 12 per cent respectively.
The recent hikes add to the burden of low-income earners, particularly those under the Domestic Lifeline Tariff, who consume between 0-30 kWh monthly and form 71.3 per cent of the customer base.
Prior to these increases, electricity prices had been on a decline for five consecutive months, largely due to the production of cheaper hydropower following sufficient rainfall and a strong shilling that reduced the cost of foreign currency-denominated power purchases.
Still, the expense of living, which is already on the rise, is expected to get worse due to the current price surge.
Even if fuel inflation has decreased due to lower pump prices and lower energy costs earlier in the year, inflation is still expected to rise from the current 5.1% rate due to the new electricity tariffs.
The most recent changes to electricity prices coincide with mounting worries about how Kenyan households would be affected financially. There are already indications that inflation will continue to rise, and businesses are predicted to pass on the increased cost of electricity to customers.
