Hard times ahead as EPRA announces new electricity tariffs effective April 1st.
Kenyans are anticipating hard times ahead as EPRA increases electricity tariffs. The energy watchdog annnounced that as from next week, energy will go up to 63 per cent after they approved higher tariffs by Kenya Power.
This initiative targets to raise more money to fund the upgrade of its ageing distribution systems.
EPRA stated,”With a view of meeting the social policy objective, the Lifeline Tariff band has been reduced from 100-kilowatt hour(kWh) per month to 30kWh, to cushion and address the needs of low-income households in the society.”
“Accordingly, these consumers will be cross-subsidised by the other consumer categories in order to protect the vulnerable members of society. Despite this reduction, the Lifeline Tariff band will account for 6.3 million customers, representing 71.31 per cent of the total number of consumers. This covers a majority of the vulnerable sector base also known as ‘Hustlers’,EPRA added.
The newly approved tariffs will see Kenya Power net Sh177 billion in revenues in the current 2022/2023 financial year. However, this will be Sh18 billion lower compared to the Sh195 billion Kenya power had targeted in its initial application to Epra.
“This will meet energy purchase costs and allow for system expansion,” EPRA outlined.
On the flip side, this review will have a positive impact on customer for instance street lighting tariff bracket set for the greatest cost reduction of Sh1.88kWh by 2025/25.
EPRA stated,” This will help spur economic activities of the manufacturing industries and in turn lower cost of goods.”
In the reviewed tariff schedules, the domestic customer tariff category has been classified into domestic lifeline
EPRA stated,”Domestic lifeline customer category will realise a reduction of four per cent in the end user bills. This represents approximately 6.4 million customers. The small commercial 1 customer category will realise a reduction of four percent in their end-user bills.”
“Domestic ordinary 1 customer category consuming between 30-100 and small commercial 2 customer category consuming between 30-100 will have an increase of 19 percent in their end-user bills,” read part of the statement.
This will also enhance financial sustainability and upgrade transmission.
EPRA stated,”The proposed tariffs will safeguard the financial sustainability of the sector by ensuring Kenya Power meets its power purchase and financial obligations. It will also ensure improved service delivery by scaling up refurbishment and upgrade of transmission and distribution system.”