Heavy rains signal lower electricity bills next month

Energy Regulatory Commission chief executive Joseph Ng'ang'a. PHOTO | FILE | NATION MEDIA GROUP

What you need to know:

  • ERC says increased hydro-power generation will further cut the use of expensive thermal and ultimately reduce the monthly adjustable fuel cost charge in electricity power bills.

The Energy Regulatory Commission (ERC) has promised lower electricity bills next month due to ongoing heavy rains that have filled dams for cheaper hydropower generation.

The regulator says increased hydro-power generation will further cut the use of expensive thermal and ultimately reduce the monthly adjustable fuel cost charge in electricity power bills.

The fuel costs charge, which is linked to the amount of power generated from expensive diesel and supplied to the national grid, has remained unchanged since the start of the year at Sh2.31 kilowatt hour.

Rising demand for power has prompted Kenya Power to step up the use of expensive thermal power, denying consumers cheaper electricity at a time when the use of low cost geothermal and hydro power has increased.

“We use data for the last month to calculate the fuel cost. Definitely, when hydros are generating at peak, the benefit will come next month,” ERC director-general Joseph Ng’ang’a said. “It will definitely have an impact on the fuel cost.”

Electricity distributor KenGen last week issued an alert that some of its power dams are full and have started spilling—a pointer to increased electricity from hydro now that the meteorological department is forecasting more rains in coming months.

Kenya relies on an energy mix comprising hydropower, the cheapest source at Sh3 per unit, geothermal energy (Sh7) and expensive thermal power, which is priced at Sh18.

The injection of additional 280 megawatts (MW) of geothermal power to the grid in the second half of 2014 cut the share of thermal electricity, reducing power bills by about 30 per cent.

With Kenya not expecting more geothermal power in coming months, the share of hydro power is expected to influence electricity prices this year.

KenGen in December announced it had stepped up hydropower generation and forecast lower bills on account of lower fuel adjustment levy.

The expected benefits were wiped out by an increase in expensive thermal power that was injected to the national grid to meet the rising demand.

The ERC data shows that thermal power consumption grew to 114 million units (accounting for 13.5 per cent) in March from 92 million units in December, marking an increase of five million units.

Geothermal power consumption dropped to 383 million units (45.3 per cent) from 387 million units, or an increase of five million units.

Hydropower generation grew from 306.6 million kilowatt hours (kWh) in December to 334 million in March, accounting for 39.5 per cent.

Power bills in Kenya are made up of a fixed charge, a demand fee and a monthly variable—fuel and foreign exchange adjustments.