Kenyans Paid More for Power in 2017 – Genghis Capital

Kenyans paid more for power in 2017 according to a report from Genghis Capital.

The cost of power ticked up over the past year following adjustments to components of the power tariff.

“Recently in January, the foreign currency component (covers foreign currency costs incurred by KPLC and power producers) was reviewed upwards by the Energy Regulatory Commission, to 1.40 shillings, the highest in the latest six months,” said Genghis.

Inflation charge, reviewed bi-annually rose to 0.42 shillings per unit occasioned by inflation pressures in the economy which touched a high of 11.7 percent in May 2017.

Fuel cost charge which varies with use of diesel power plants stagnated at 2.85 shillings per unit (not passed on to customers as should) between February and August 2017 despite increased use of diesel power occasioned by a low output from hydro-power plants.

This translated to 10.1 billion in unrecovered fuel costs in KPLC’s 2017 balance sheet.

Fuel cost charge has so far been reviewed upwards by 52.6 percent to 4.35 shillings per unit in December 2017.

The pass-through incremental power cost adjustments will translate to rise in fuel inflation numbers (exacerbated by rising in global crude price) which ticked up to 5.4 percent in December from January’s 0.67 percent and 2017’s average of 3.39 percent.