Kenya Power has sounded the alarm over a looming increase in electricity prices, cautioning that the recent drop in power costs could be short-lived if a standoff with the Nairobi County Government over wayleave charges escalates.
Speaking in Nairobi on Tuesday, March 4, during a meeting with the Kenya Editors Guild, Kenya Power Managing Director Joseph Siror acknowledged that consumers had been enjoying a reprieve in electricity costs due to the strengthening of the Kenyan shilling against the US dollar. He explained that the stronger currency had significantly lowered pass-through costs, easing financial pressure on power bills.
Temporary Relief in Power Costs
According to Siror, the base electricity tariff has dropped from Ksh19.04 per unit in 2023 to Ksh17.94 per unit in 2024, a development that has been welcomed by both domestic and industrial consumers.
“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 structure. So far, the base tariff has dropped from Ksh19.04 per unit in 2023 to the current Ksh17.94,” he stated.
While this decline signals a positive trend, Siror emphasized that the relief could be short-lived if new wayleave fees are imposed on electricity infrastructure.
Impending 30% Electricity Price Surge
Siror revealed that Kenya Power operates and maintains over 319,000 kilometers of power lines across all 47 counties, ensuring electricity supply to millions of homes and businesses. However, under a new proposal, the Nairobi County Government and other stakeholders are pushing to introduce wayleave charges on power lines, which could have devastating financial implications.
“Under the proposal to charge wayleaves on electricity infrastructure at a cost of Ksh200 per meter, this translates into KShs.63.8 billion per year,” Siror explained.
This additional cost would inevitably be passed on to consumers, pushing up electricity prices by as much as 30%.
“The overall impact is that electricity will become unaffordable for the majority of Kenyans,” he warned.
Economic and Industrial Ramifications
If implemented, the wayleave charges will not only affect household electricity bills but also have far-reaching consequences for businesses and industries that rely on affordable power. Increased electricity costs could cripple manufacturing, raise production costs, and ultimately lead to higher prices of goods and services.
Additionally, the increased power costs could slow down economic growth and deter investors who depend on stable and cost-effective energy supply. Kenya’s industrial sector, which has been pushing for lower energy costs to enhance global competitiveness, could suffer a significant setback.
Call for Policy Review and Stakeholder Engagement
Siror called on policymakers and relevant authorities to reconsider the move, warning that burdening consumers with additional electricity costs would be counterproductive to the country’s development goals. He urged for a collaborative approach to finding a balanced solution that ensures sustainable revenue collection while keeping electricity affordable for all Kenyans.
As the debate over wayleave charges continues, consumers and businesses will be watching closely to see whether the government will intervene to prevent a surge in electricity prices.
