Fuel cost levy in May electricity bills highest in five years

The fuel cost levy in May electricity bills has jumped to Sh3.75 per unit of power -the biggest margin in five years as dry weather forced Kenya to step up electricity using diesel.

Consumers also bear the brunt of a local weak currency with the forex element also up by more than a shilling for every unit consumed.

The prolonged dry weather forced the country to generate more electricity using diesel, setting the stage for a rise in electricity prices through the monthly adjusted fuel surcharge levy as well as the forex adjustment charges.

At Ksh.3.75, homes and business will pay close to a billion shillings more in fuel costs charges based on the average monthly consumption.

Data by the Energy and Petroleum Regulatory Authority (EPRA) in the official Kenya gazette shows fuel levy — which is influenced by the share of electricity from diesel powered sources—rose to Ksh.3.75 per kilowatt hour (kWh), up from Ksh.2.75 last month.

The Ksh.3.75 charge took effect last Friday for pre-paid consumers with postpaid users set to feel the pain from next month.

The additional charges will be highest rise since May 2014 when the fuel levy rose by Ksh.2.03.

EPRA CEO Parvel Oimeke says intervention from wind sources from the Loiyangalani wind farm eased things a bit and helped avert potential rationing after the drought cut generation hydro power by 39 percent or 163 million kilowatt hours (units) between last August and February this year.

This wiped out the benefits of the additional 151 million kWh of wind and solar power that was injected in the same period.

Data for March and April, which is yet to be released, may be worse on the delayed rains.

The government had promised cheaper electricity from increased use of the two green sources—Lake Turkana Wind and Garissa Solar plant — by reducing costly thermal power and ultimately cutting the fuel cost adjustment levy in bills.