President Kenyatta on Wednesday, September 29 ordered the lowering of electricity prices in Kenya within the next four months.
According to a report from President Kenyatta seen by Pulse Live news desk on Wednesday, September 29, he raised concern over the irregular power purchase agreements entered by Kenya Power.
“The consequence of the proposed interventions is that a consumer who previously spent Sh500 per month on electricity shall by 31st December 2021 pay Sh330 per month.
This cost reduction will be achieved through the reduction of the consumer tariffs from an average of Sh24 per kilowatt-hour to Sh16 per kilowatt-hour which is about two-thirds of the current tariff,” the report reads.
The Presidential directive required the Ministry of Energy to reduce power tariffs by 33 percent to an average of Sh16 per kilowatt hour (kWh) from the current Sh24 a unit.
The cut to Sh16 a unit is set to benefit domestic consumers who use more than 100 kWh per month and do not enjoy the State subsidy.
Nearly four million of Kenya Power domestic customers, who consume less than 100 units monthly, pay an average of Sh16 per kWh.
This means that the planned 33 percent cut in electricity prices will benefit homes that consume more than 100 units monthly, mainly middle class homes plugged to gadgets like cookers, water heaters and fridges, who on average pay the Sh24 a unit.
Under the current billing structure, homes in rural Kenya and low-income urban neighbourhoods, which consume less than 100 kWh monthly, enjoy a subsidy of Sh5.72 per unit.
The 33 percent cut implies that all homes will enjoy the subsidy irrespective of their monthly consumption levels.
Millions of homes have recently been hooked to the power grid under a government subsidy meant to speed up electrification. This has increased Kenya Power’s customer base from about two million in 2013.
Most are, however, in remote areas and slums with low consumption levels since their electricity use is limited to lighting and charging phones, and powering small electronic appliances.
In March 29, President Kenyatta constituted a task force to review the power purchase agreements after it was discovered that independent power produces sold electricity to Kenya Power at inflated prices.