KP lower electricity price while MPs seek to end its monopoly

Last Updated 13 years ago by Kenya Engineer

Kenya Power’s rein as the sole power distributor of power in the country will come to an end if the Members of Parliament vote to liberalise the distribution of power in the country.

The discussion came about after a motion brought forth by a member of the Energy, Communication and Information committee, David Bowen who argued that if the move is implemented, it would encourage competition, improve efficiency, and reduce the high cost of power thereby attracting investors into the country.

Consistent power outages have led to many consumers considering the power distributor as inefficient. To add to that, the MPs pointed the company’s inefficiency saying that it had only managed to connect a small per cent of Kenyan’s to the grid with 85 per cent still unconnected after 50 years in operation. The country last month experienced a national power outage which raised the already built in-confidence with the company.

As the East Africa’s largest economy, the country’s power levels are considered low despite great potential in power resources. This is however owed to slow exploitation of available renewable power sources.

Fuel prices lowered

Elsewhere, the fuel cost and forex charges on consumer bill has now been reduced saving households and businesses close to Sh500 million this month. The price charges indicate that the two charges will this month total Sh5.29, the lowest in the past one year compared to Sh6.01 in June.

The fuel cost goes down Sh0.42 from last month’s Sh4.72.The drop is attributed to the increase in the proportion of power coming from hydro sources leading to lower usage of thermal power stations.

This however stands to change if the Value Added Tax bill which is due for parliament approval is increased. The bill seeks to increase the VAT charge on electricity consumption to 16 per cent from the current 12 per cent.

In a move to meet rising demand for electricity, the Kenya Power has lined up expansion projects to raise additional 1,248MW in the next five years, a project that would cost Sh17.8 billion, Sh45 billion in support equipment and Sh16.9 billion on refurbishing its transmission system.

The vice President moved in to stop the Energy Regulatory Commission from approving the application by Kenya Power to raise its tariffs by 50 per cent. The raising of the tariffs would have.

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