NAIROBI, Kenya, Feb 22 – The Energy and Petroleum Regulatory Authority (EPRA) has refuted claims of overbilling customers, coming at a time when Kenyans have been complaining of high electricity prices.
The regulator stated that effective April 2023, there was a tariff review for the periods 2023–2024, 2024–2025, and 2025–2026, which now included the previously unfunded costs as well as the generation costs of the eight plants not included in the previous base tariff.
An analysis done by Nation showed that customers using less than 30 units of power per month would see their charges go up by 16.5 percent in January 2024.
“In effect, there is no over-billing. The approved tariff now includes the costs of power plants commissioned from October 2019, to March 2023,” EPRA said in a statement yesterday.
“Even after approval of the new tariff, we have the obligation to clear the outstanding unfunded subsidy, which continues to be recovered through the pass-through mechanism up to December 2024,” it added.
In August 2018, the Authority set a base tariff with subsequent amendments in November 2018.
The tariff was applicable for a period of one year pending re-submission of a revised application capturing efficiency gains, among others.
Between the last tariff reviews and the current review effected in April 2023, seven new power plants were commissioned with a total capacity of 502 megawatts (MW).
They included Olkaria V (158 MW), Olkaria I Unit 6 (83 MW), Kipeto Wind Power (100 MW), Selenkei (40 MW), Cedate (40 MW), Malindi Solar (40 MW), Alten Solar (40 MW), and Kianthumbi Small Hydro (0.5 MW).
According to EPRA, the revenue requirements of these plants did not form part of the base tariffs, thus increasing the cost of fuel energy to consumers across the country.
“The Authority recovered these power purchase obligations through the pass-through mechanism, a mechanism available to the regulator by Law, which saw a consequent increase in the Fuel Energy Cost,” EPRA stated.
The Authority explained that if the recovery of these generation costs was ignored, the power plants would have inadequate revenues to operate, resulting in payment defaults and shutdowns and thus compromising the security of power supply in the country.
