EXPLAINER: Paying more, getting less? Why your tokens are shrinking

Ever wondered why your Sh1,000 electricity tokens don’t stretch as far as they used to? You’re not alone. Kenya Power says the answer lies not in a sudden hike in rates but in a maze of taxes, levies, and adjustments that quietly chip away at your purchase.

Now, the utility giant is lifting the lid on how its complex tariff system works and why understanding it could save you from nasty billing surprises.

Nairobi resident James Mwangi says his Sh1,000 token now barely lasts two weeks.

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“I used to get over 60 units with the same amount. Nowadays, I’m lucky to get 40. It feels like my money is disappearing,” he says.

Kenya Power has issued detailed communication explaining the components that influence electricity billing, especially for households consuming between 30 and 100 units of electricity per month.

Understanding your electricity bill is the concept of a "tariff."

Kenya Power defines a tariff as the combination of prices, rates, costs and all other charges, including adjustments and formulae, which collectively determine the cost of electrical energy supplied to consumers.

The utility firm explained that customers are placed into different tariff categories based on their average electricity consumption over three months, not just one month’s usage.

These tariffs are designed not only to cover the costs of generating, transmitting, and distributing electricity but also to promote efficient energy use and sustain the power supply infrastructure.

For many domestic consumers, the relevant category is the Domestic 2 – Ordinary tariff, or DC2-0. This tariff applies to households whose monthly electricity consumption exceeds 30 units but does not go beyond 100 units.

The energy charge for this category is set at Sh16.45 per unit, excluding taxes and levies. This base rate is the fundamental charge for the actual energy consumed, but does not represent the total amount a consumer pays.

“The Sh16.45 per unit rate for DC2-0 is only the energy charge,” Kenya Power explained.

“Other costs such as the fuel cost charge, foreign exchange adjustment, inflation adjustment and taxes are added separately and appear in the final bill.”

These additional charges are levied by regulatory bodies and government policy, not Kenya Power directly, and they can fluctuate monthly in response to economic conditions and global energy markets.

The taxes and levies commonly applied to electricity bills include Value Added Tax (VAT), inflation adjustments, fuel cost charges linked to global oil prices and foreign exchange fluctuation adjustments, which reflect changes in currency exchange rates affecting imported infrastructure and loan repayments.

Each of these factors increases the effective price per unit beyond the basic energy charge.

When a customer purchases electricity tokens worth a certain amount, say Sh1,000, the entire sum is not directly converted into units at the base rate of Sh16.45.

Instead, a portion of this amount is first deducted to cover the various taxes and levies. Only the remaining balance is used to buy actual units of electricity.

For Grace Wambui from Kikuyu, it's frustrating.

“You budget for electricity, thinking Sh2,000 will take you through the month, but with all the deductions, you’re forced to top up again," she says.

This deduction reduces the number of units a customer receives, leading to the impression that they are getting fewer units for the same price.

If 30 per cent of the Sh1,000 payment goes to taxes and levies, then Sh300 is deducted upfront. The remaining Sh700 is used to purchase electricity units at the Sh16.45 rate, yielding approximately 42.55 units.

However, if a customer assumes the full Sh1,000 is for buying units, they might expect about 60.79 units, creating a perceived shortfall.

Kenya Power encourages consumers to carefully examine their electricity statements, which break down the energy charge, taxes, and levies.

This transparency helps customers understand why their bills may vary even when consumption appears stable.

“This is part of our effort to ensure customers have a clear understanding of how their monthly electricity bill is calculated,” Kenya Power stated.

The billing cycle also influences how tariffs are applied.

Electricity consumption is measured over a billing period, typically monthly, and the tariff classification depends on the total units consumed during that period. Consumers whose usage fluctuates may move between tariff bands, which can affect the overall bill.

Domestic 2 falls between Domestic 1, which covers low consumption under 30 units, and Domestic 3, which covers consumption above 100 units.

Most households that use a moderate amount of electricity, such as small families or average urban homes, typically fall within this DC2-0 category.

According to Kenya Power, classification into this tariff band is automatic based on monthly usage and does not require a customer application.

Kenya Power advises customers to monitor their consumption carefully to stay within their preferred tariff bands and manage their electricity costs.

Simple energy-saving measures like switching off unused appliances, using energy-efficient lighting, and limiting the use of high-power devices can help maintain consumption within the Domestic 2 range.

Ann Mutua from Njiru says her family has tried cutting back.

“We avoid using the microwave and iron at night, but still end up in the higher band. It’s exhausting,” she says.

“The number of residential customers in the DC2-0 and DC3 categories is expected to rise as households increasingly rely on electrical devices for daily activities,” Kenya Power noted.

With urbanisation and growing demand, the tariff system remains under constant review to balance affordability and the cost of a reliable power supply.

In addition to clarifying tariffs, Kenya Power is working to improve customer relations and digital access through enhanced self-service platforms such as USSD codes, the MyPower app and online portals.

These tools allow users to track usage, receive billing updates, and engage with the utility more conveniently.

Consumers are encouraged to contact Kenya Power’s customer service centres or online support channels if they notice any discrepancies in their bills or require assistance understanding their charges.

However, Joseph Njoroge from Kabiria says he has had to adjust the amount of money he uses for his tokens.

According to Njoroge, for Sh1500, he gets around 70 units or slightly above that.

He says it's all about consistency

Try and monitor your electricity consumption," he says.

Understanding that the Sh16.45 per unit is the baseline energy charge, exclusive of additional taxes and levies, is crucial for budgeting electricity expenses and avoiding surprises.

The perception of receiving fewer units for a similar payment is often due to the statutory deductions that form part of the overall tariff structure.

Kenya Power’s detailed explanation aims to empower consumers with the knowledge necessary to interpret their electricity bills accurately and manage their consumption effectively.