Electricity Prices Set To Rise As EPRA Implements Forex Fluctuation Adjustment

The Energy and Petroleum Regulatory Authority (EPRA) has announced a new foreign exchange fluctuation adjustment that will affect electricity prices for all meter readings taken in March 2025.

This adjustment, which is expected to drive up power costs for consumers, comes amid an already challenging economic environment where Kenyans are grappling with high inflation and rising energy costs.

In a public notice issued by EPRA Director-General Daniel Kiptoo Bargoria, the authority stated that an additional 80.70 cents per kilowatt-hour (kWh) would be levied on electricity bills as a result of currency fluctuations.

This increase will apply across the board to all electricity consumers, further straining household and business budgets.

According to EPRA, the forex fluctuation adjustment is in line with Clause 2 of Part III of the Schedule of Tariffs 2023, which allows electricity prices to be modified in response to changes in exchange rates.

This clause ensures that power producers and suppliers recover losses incurred due to shifts in the value of the Kenyan shilling against major foreign currencies used in financing electricity generation.

“Pursuant to Clause 2 of Part III of the Schedule of Tariffs 2023, notice is hereby given that all prices for electrical energy specified in Part II of the said Schedule will be liable to a foreign exchange fluctuation adjustment of plus 80.70 cents per kWh for all meter readings taken in March 2025,” read part of the notice issued by EPRA.

The increase in electricity costs will affect all categories of consumers, from small domestic users to large industrial consumers. Currently, domestic consumers in the lifeline category (0–30 kWh per month) pay approximately Ksh12.23 per kWh, while those consuming more than 100 kWh per month are charged Ksh19.08 per kWh.

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With the additional forex fluctuation charge, consumers should prepare for even higher power bills in the coming months.

The forex adjustment is primarily meant to compensate for exchange rate losses suffered by electricity producers and suppliers. Data from EPRA indicates that independent power producers (IPPs) bore the largest exchange losses, amounting to Ksh736.18 million.

On the other hand, Kenya Power and Lighting Company (KPLC) recorded an exchange gain of Ksh25.29 million, while Kenya Electricity Generating Company (KenGen) experienced a loss of Ksh12.78 million.

The total exchange loss across all power entities stood at Ksh748.69 million, reflecting the impact of currency depreciation on energy production costs.

In February 2025, Kenya generated and purchased a total of 1.12 billion kWh of electricity, excluding exports. The forex fluctuation adjustment will now be factored into consumer bills, increasing the overall cost of electricity for households and businesses alike.

The announcement of higher electricity costs comes at a time when many Kenyans are already struggling with high fuel prices and general economic inflation.

The rise in power tariffs will not only burden individual households but also increase operating costs for industries and businesses, potentially leading to higher prices for goods and services across the economy.

Many manufacturers and business owners have previously raised concerns about Kenya’s high electricity costs, which make local production more expensive compared to neighboring countries. The latest adjustment by EPRA could further impact industrial competitiveness and discourage investments in the energy-intensive manufacturing sector.

In addition to the forex fluctuation adjustment, EPRA has also announced a review of the Water Resource Management Authority (WRMA) Levy, which will increase by 1.28 cents per kWh for all meter readings taken in March 2025.

This means that consumers will face a double increase in electricity costs, further stretching household and business budgets.

As Kenya continues to grapple with economic uncertainties and a volatile exchange rate, electricity prices are expected to remain a contentious issue. The government has been making efforts to stabilize energy costs, including investing in renewable energy projects and negotiating better power purchase agreements with independent producers.

However, the continued depreciation of the Kenyan shilling against major global currencies presents a significant challenge in maintaining affordable electricity prices.

The latest adjustments by EPRA serve as a stark reminder of the impact of exchange rate fluctuations on the cost of essential services. As power bills rise, consumers will need to brace for higher expenses, while policymakers will be under increased pressure to find long-term solutions to the country’s energy pricing woes.

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