Business News
No respite in sight for power consumers
KPLC workers set up new giant transformers at the Embakasi depot. Consumers will pay more for electricity if the ongoing rains do not fill the Seven Forks dams complex to required levels. PHOTO/ FILE
Posted Saturday, November 21 2009 at 19:00
Save energy
“Heavy reliance on thermal generators has increased fuel cost charges in customers’ bills. We urge them to exercise energy conservation measures to keep their bills at affordable levels,” he said.
According to the power distributor, the country has not received sufficient rain, which means that the increased fuel cost charges will be sustained or change slightly upwards due to thermal plants using more oil products to generate power.
KPLC, however, expects the fuel cost surcharge to go down after hydroelectric power plants resume optimum generation in a few months, assuming sufficient rain falls.
Apart from adversely impacting household budgets, the high cost of power has the multiple effect of forcing manufactures to raise the price of their goods, increasing nflationary pressure and hurting the competitiveness of Kenya’s exports.
Failure of the short rains to fill the dams means that consumers will have to wait for the March-to-May long rains for a reprieve.
But in the meantime, users will still bear a heavy cost burden because of continued reliance on fuel-driven power generators.
In August KenGen contracted Aggreko, an independent power producer, to provide an additional 140 megawatts of emergency electricity to cushion the country against effects of rationing.
Exit clause
The contract, signed by KenGen on behalf of the government, is expected to run for a year but has an exit clause should the Seven Forks dams be replenished.
The national power producer posted a 48 per cent increase in pre-tax profit to Sh4.56 billion in the 12 months ending June 30, 2009 as higher prices offset the impact of a severe drought.
“Hydrology this year was the worst we have had in the last 75 years. As a consequence of this, units sent out declined from 4,818 million kWh in 2008 to 4,339 million kWh in 2009,” the company said in a statement.
Earnings in 2009 were impacted favourably by the implementation of a new power purchase agreement with KPLC which made a higher average yield of Sh2.42 per kWh compared with Sh2.36 in 2008.
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