Electricity bills may go up – again

Energy Permanent Secretary Francis Nyoike has warned Kenyans to brace themselves for higher electricity charges should the shilling weaken further against major international currencies.

He said Kenya Power had factored in an element of exchange rate in the power bills to help the firm settle its obligations to independent power producers.

He added that both KenGen and Kenya Power have to service loans that had been borrowed and are repaid in their original currencies hence the adjustment in foreign exchange to help the firms meet the payments.

Repay loans

“The utility companies have taken some loans on concessional terms, which are meant to be repaid in their original currencies to the creditors. They have to raise money to repay these loans without further demands on the budget,” he said.

He also said Kenyans should know that the power generating companies buy oil in US dollars and have to factor in depreciation of the shilling in the cost.

“What Kenya Power is saying is that the cost of producing power has gone up with the current low water levels in dams and it has to be borne by the consumers,” he said.

He said the limited power rationing that has been rolled out to major industrial centres would be addressed by the installation of 60 megawatts of emergency power at Muhoroni, with 20MW expected to be injected into the national grid by the end of the month.

“Once we have the 20MW up and running, we will also try and get the second turbine at Turkwell running. If it works, the remaining 40MW meant for Muhoroni will instead be installed at Embakasi because it is also a problem area,” said the PS.

He added that a plan to extend the power transmission lines in the country was under way, targeting the northern and western parts of the country.
He said the most immediate need was in western Kenya, where, he noted, there was low voltage.

He said the coastal region was not affected by power shortage, while western was the worst hit. He said this would be addressed by installation of additional emergency power at Muhoroni. 

Mr Nyoike was speaking in Nyeri on Saturday during a seminar organised to discuss how to align the energy sector with the new Constitution.

The PS also hit out at petroleum retail companies which speculate over prices.

He said oil marketers had been hoarding fuel in anticipation of the expected price changes announced on the 15th day of each month.

The PS said this had led to undermining of the system and to some extent the cause of the shortages experienced in the sector.

He said he had written to a major oil marketer requesting that they stop speculating over the expected prices in the future.

He added that new recommended prices of petroleum products would be released on Monday in line with the policy of the Energy Regulatory Commission.