Consumers stare at higher bills on Kenya Power, counties feud

The way leave battle between Kenya Power and county governments could push up the cost of electricity by Sh5.40, according to the power retailers’ managing director Joseph Siror.

Speaking to editors in Nairobi, Siror termed the plan by counties to charge for way leave on power infrastructure as unconstitutional.

He said that the proposal to charge Sh200 per metre for electricity infrastructure, would translate into Sh63.8 billion per year, translating to approximately 30 per cent of the energy sector’s revenue requirements, which must be recovered from the monthly electricity bills.

“The overall impact is that electricity will become unaffordable to a majority of Kenyans,” Siror said.

He added that the move would erode gains made in reducing power costs in the country where the base tariff has declined from Sh19.04 per unit in 2023 to the current Sh17.94 on a stronger shilling.

“The strengthening of the shilling has resulted in lower pass-through costs to customers, including forex and fuel costs, which are heavily dependent on the prevailing dollar exchange rate.”

While Kenya Power is citing Section 223 of the Energy Act 2019, which prohibits any public entity from charging levies on public energy infrastructure without regulatory approval, the Council of Governors (CoG) is accusing the utility firm of disregarding advisory from the Attorney General and the provisions of Section 57 of the Physical and Land Use Planning Act 2019.

It stipulates that ‘A person shall not carry out development within a County without development permission granted by the respective County Executive Committee Member in charge of Land Use Planning’.

According to the power distributor, the introduction of way leave on its expansive power lines which measure 319,000 kilometres of power lines across all 47 counties will impact retail tariffs.

Last week, governors accused the power distributor of wielding unchecked power over counties and other entities, saying that it often resorts to abrupt power disconnections without due consideration of the broader impact.

Siror said Kenyans should expect power cost to drop further as the Kenya Power onboard cheaper Independent Power Producers IPPs.

He said the public should not be opposed to Independent Power Producers (IPPs), saying that they are needed for power stability.

“IPPs are not bad. They are much needed for power stability. Our focus should be on ensuring that we onboard cheaper ones so that consumers benefit. We are planning to onboard two which will sell us power at less than 6 US cents,’’ Siror said.

He explained that power prices have dropped by close to Sh2 per unit in the past year on stable shilling.

“This has added to the gains from the decline in the base energy cost following a review of the electricity tariff in April 2023 which put in place a three-year tariff that provides for a lower cost per unit, starting in July of each of the three years.

According to him, the base tariff has declined from Sh19.04 per unit in 2023 to the current Sh17.94. He added that the firm is working towards lowering system losses, a move that will see users benefit more.

System loss is the difference between total net generation and energy sales on the system expressed as a percentage of net generation. These losses accrue from leakages due to illegal connections or shaky transmission.

“As we cut losses we are gearing towards lowering the cost of power because once we lower our distribution and transmission losses, that directly translates through our power bills and that is what energy efficiency is all about,’’ Siror said.

The firm attributed the challenge to heavy reliance on distribution lines for transmission, explaining that lower voltage levels contribute to higher system losses.