ERC mulls electricity discounts for industries

ERC mulls electricity discounts for industries
A woman walks her child to school past high voltage electrical pylons on the outskirts of Kenya's capital Nairobi, March 14, 2011. REUTERS/Thomas Mukoya/File Photo

Industries and commercial customers are set to benefit from a new tariff aimed at lowering the cost of electricity for large power consumers.

The Energy Regulatory Commission (ERC) is mulling plans to introduce a time of use tariff (TOU) that discounts electricity prices offered during off-peak periods to the large power consumers.

This will come as a welcome relief to the manufacturing sector which has long protested that the high cost of electricity is a deterrent to Kenya’s bid to become a manufacturing hub.

On Monday, ERC acting director General Pavel Oimeke said with Kenya’s electricity generation set to rise with injection of power from Lake Turkana Wind Power, there will be surplus electricity in the grid that could benefit industrialists and commercial electricity users.

“The need for TOU tariffs is spurred by a possibility that Kenya could start experiencing surplus electricity supply due to increased electricity capacity. The economy will soon benefit from additional capacity including 300MW from Lake Turkana Wind Power. The introduction of TOU tariffs will help promote commercial and industrial growth in Kenya while maximizing on the surplus energy available at off-peak hours,” Mr Oimeke said.

At a stakeholder meeting with representatives from the manufacturing sector as well as Kenya Power, Mr Oimeke said the tariff will be introduced on a pilot basis to gauge its effectiveness.

The tariff will target consumers who meet certain energy consumption thresholds ranging from 415 volts to 132 kilovolts of electricity.

The government has continuously pushed to keep electricity costs low to boost the country’s competitiveness.

The ERC recently rejected Kenya Power’s proposal to raise power charges.

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