ERC rejects Kenya Power’s bid to raise electricity tariffs

By Soko Directory Team / September 11, 2017

The Energy Regulatory Commission (ERC) has rejected Kenya Power’s application to raise electricity tariffs as a result of rising costs.

According to the Kenya Power & Lighting Company (KPLC) the high cost is attributed to increased customer connections and power leakages on its ageing infrastructure.

The regulator has urged the utility firm to enhance efficiency in its operations as an avenue for boosting profitability.

The ERC has been steadfast in keeping the cost of power low and in the process, preserving Kenya’s competitive edge as a business hub, in a bid to boost the country’s subdued economic growth, that came in at 4.7 percent in Q1’2017.

However, growth has been slow, instigated by the drought, brought about by depressed rainfall in the first half of the year, the interest rate caps, which have further subdued private sector credit growth, currently at 2.1 percent as at May, from 2.4 percent recorded in April, and 20.9 percent registered in the same period in 2015, and increased political uncertainty forcing investors to take a wait and see stance.

In Uganda, the Electricity Regulatory Authority (ERA) reduced the price of electricity by 1.5 percent  in the second quarter of 2017, to keep the cost of goods low and enhance growth in the economy, whereas in Tanzania, the regulator was forced to approve a power tariff increase in order to maintain the operations of the Tanzania Electric Supply Company (TANESCO), with inflation edging higher as a result of the power tariff increase.

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