Kenya Power cuts large firms’ weekend tariffs by half

Thursday December 28 2017

A worker sorting textile thread at Rivatex in

A worker sorting textile thread at Rivatex in Eldoret, Kenya. The country is struggling to revive its industrial sector that has largely lost out to Ethiopia due to the high cost of electricity. PHOTO FILE | NATION 

BUSINESS DAILY
By BUSINESS DAILY
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Kenya Power has cut electricity tariffs for large businesses and manufacturers by half over weekends to entice investors and lower the cost of consumer goods.

The discounted tariffs are contained in the latest gazette notice by the Energy Regulatory Commission (ERC) after the rates took effect on December 1 in the quest to boost economic growth and job creation.

The lower charges will be effective on Saturdays and Sundays between 2pm to 8am and on public holidays.

The weekend cheaper rates have been introduced together with the discounted night-time electricity tariffs which are effective from 10pm to 6am, a window within which demand for power is low.

In the new tariff structure, commercial users who are metered at between 450 volts and 11 kilovolts (kV) will pay Ksh4.60 ($0.04) per unit from Ksh9.20 ($0.09), a 50 per cent discount.

But their fixed charge has been retained at Ksh2,500 ($25) and they will also continue paying a demand charge of Ksh800 ($8) per kilovolt-ampere (kVA).

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Consumers metered at above 11 kilovolts (kV) will pay an energy charge of Ksh4 ($0.04) per unit, from Ksh8 ($0.05), while the rate for those consuming above 33 kilovolts has been halved to Ksh3.75 ($0.04).

Fixed charges

Their fixed charges remain unchanged. Those above 33 kilovolts will continue paying a fixed charge of Ksh17,000 ($165).

“It is about, how do we create jobs for our people? How do we grow as a country? How do we move from an agro-based to an industrial-based country so that we can be able to enhance our GDP,” Joseph Njoroge, the principal secretary in charge of electricity at the ministry said earlier.

Kenya charges firms an average of Ksh15.70 ($0.15) per kilowatt hour, which is seen as uncompetitive compared with other African nations such as Ethiopia, South Africa and Egypt.

The government has been trying to boost investments in the industrial sector with modest success.

The shift by manufacturers to night-time production is expected to ease demand pressure during peak hours, which often forces Kenya Power to switch on the more expensive diesel generators to stabilise supply.

Ease pressure

Kenya consumes less than half the peak power demand (currently 1,727 megawatts) between midnight and 5am.

The peak time stretches from 9am and climaxes at between 6pm and 9pm when Kenyans return home from work switching on house lighting, cooking appliances and TVs.

Shifting industrial production to night shift is one of the several options the government is pursuing to lower the cost of production that will ultimately cut the cost of consumer goods and make Kenyan products competitive in the global market.

The night tariff had been introduced in 1999/2000 but squeezed Kenya Power’s margins since all large consumers shifted to the off-peak times with the electricity distributor incurring heavy losses. It abandoned the model.

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