Electricity distribution company, Kenya Power, pushed poor households to pay an extra Sh15.3 billion for its increased use of electricity generated from costly fuel generators.
Kenya power which has recorded doubled profits reported that fuel adjustment surcharges passed to consumers in the year to June increased to Sh26.49 billion from Sh11.18 billion.
The power utility links the jump to increased generation of electricity using diesel due to reduction in hydroelectric power, shining a spotlight on power purchase agreements signed with private investors.
“This increase in dispatch from thermal plants was due to inadequate electricity generation from hydro sources owing to failed rains, unavailability of key geothermal plants, the interruption of the Loyangalani-Suswa transmission power line, and an increase in fuel prices globally during the year,” Kenya Power said.
Kenyan households have year in year out complained of ever increasing electricity charges with all the costs including idle capacity charges charges being passed on to consumers to compensate power generators for electricity generated but not used.
Kenya Power’s net profits doubled to Sh3.5 billion but the electricity retailer did not declare dividends as this marks the fifth year it is freezing shareholder payouts.
The troubled energy distributor is also blaming drought which has left millions in need of food aid as another factor which has pushed it to rely on costly generators at the expense of its starving customers.
The drought has driven down water levels in hydroelectric power dams and the uptake of electricity from thermal energy plants has increased from 876 gigawatt hours (GWh) to 1,539 GWh in the year under review.
The jump has increased the fuel surcharge to Sh7.09 per kilowatt hour in the October bills, an increase from Sh4.63 in January, while the forex charge has also increased from Sh0.73 per unit to Sh1.48 per unit.
The hiked cost of electricity has led to pricing pressure across the economy making life unbearable for it’s customers as producers of other goods and services factor in the higher cost of energy.
The regime which retired last month failed flat in its attempts to push for review of the power purchase agreements to ease the burden on consumers.
In any typical power purchase agreement, a power producer is paid for any electricity produced, even if it is impossible for Kenya Power to sell it to consumers due to excess capacity and other factors.
But Kenya Power is also attributing its high prices on the Russian invasion of Ukraine. Russia is the world’s third largest oil producer but has not refused to sell it’s crude oil to any willing buyer including countries coerced by the West to boycott its products.
“The strategy we have is to ensure that we work with the market forces on how we can have a government-to-government relationship that will get us fuel at probably Ksh 20 to Ksh 25 per cent cheaper than in the market,” President Ruto said.
