Fuel levy in power bills hits 5-year high

The fuel cost levy in May electricity bills has jumped by the biggest margin in five years on reduced use of cheaper hydro-power following poor rains.

The dry weather forced Kenya to generate more electricity using diesel, setting the stage for a rise in electricity prices through the monthly adjusted fuel surcharge levy.

Energy and Petroleum Regulatory Authority (EPRA) data shows that fuel levy — which is influenced by the share of electricity from diesel generators —rose to Sh3.75 per kilowatt hour (kWh), up from Sh2.75 last month.

The Sh3.75 charge took effect on Friday for pre-paid consumers with postpaid users set to feel the pain from next month.

The additional charges will be highest rise since May 2014 when the fuel levy rose by Sh2.03.

“The FCC (fuel cost charge) has slightly gone up due to the prolonged drought we just went through. It would have been worse if we had no intervention from the wind power, actually we would have experienced the highest ever FCC coupled with some power rationing,” Energy Principal Secretary Joseph Njoroge said.

The drought cut generation hydro power by 39 percent or 163 million kWh between August and February, EPRA data shows.

This has wiped out the benefits of the additional 151 million kWh of wind and solar power that was injected in the same period.

EPRA is yet to release April data, which look set to be worse compared to February on the delayed rains.

The government had promised cheaper electricity from increased use of the two green sources—Lake Turkana Wind and Garissa Solar plant — by reducing costly thermal power and ultimately cutting the fuel cost adjustment levy in bills.

At Sh3.75, homes and business will pay an additional Sh930 million in fuel costs charges based on the average monthly consumption.