The Energy and Petroleum Regulatory Authority (EPRA) has announced a 16.5% increase in electricity prices starting from January 2024, citing the weak shilling and the high cost of thermal power generation as the main reasons.
This is the latest in a series of price hikes that have hit consumers hard, post the Covid-19 pandemic and the rising cost of living.
According to EPRA, the energy charge has gone up by 8.7% to Ksh.4.33 per unit, while the Foreign Exchange Rate Fluctuation Adjustment (FERFA) charge has soared by 103.7% to a record Ksh.6.46 per unit. These charges are applied to all consumer categories, including domestic, commercial, and industrial users.
The FERFA charge is meant to cushion power producers from the volatility of the exchange rate, as they incur costs in foreign currency for fuel, operation, and maintenance. The energy charge is the cost of generating electricity from various sources, such as hydro, geothermal, wind, solar, and thermal.
EPRA director general Daniel Kiptoo said the increase in the FERFA charge was due to the depreciation of the shilling against the US dollar and other major currencies.
He also said the increase in the energy charge was due to the higher share of thermal power in the generation mix, as the country faced reduced water levels in the hydro dams and lower wind speeds.
The regulator said the thermal power plants contributed 19.7% of the total electricity generated in December 2023, up from 14.8% in November 2023. Thermal power is the most expensive source of electricity, as it relies on imported diesel and heavy fuel oil.
The latest electricity price hike has sparked outrage among Kenyans, who have accused EPRA and Kenya Power of exploiting them and failing to provide reliable and affordable power.
Some have called for the government to intervene and lower the prices, while others have demanded accountability and transparency from the regulator and the utility company.