The Energy and Petroleum Regulatory Authority (EPRA) announced a welcome reprieve for Kenyan consumers in February, slashing electricity prices by an average of 9.3 per cent.
Effective immediately, domestic consumers will pay Sh29 per kilowatt-hour (kWh), down from Sh32, representing a direct saving of Sh3 per unit.
This positive development comes after a January hike of 17.3 per cent, attributed to repayments of outstanding power purchase costs by Kenya Power in foreign currencies.
Explaining the rationale behind the reduction, EPRA Director-General Daniel Kiptoo highlighted a significant decrease in forex adjustment due to lower foreign currency repayments made by Kenya Power in January 2023.
"This is due to a significant reduction in the forex adjustment on account of a decrease in the total foreign currency exchange payments made in January 2023," Kiptoo stated.
Two key factors contributed to the lower prices:
Two key factors contributed to the lower prices: Reduced foreign exchange repayments: Kenya Power successfully settled its foreign currency debts in November and December, easing the pressure on forex reserves and lowering Ferfa charges.
Fuel Energy Cost (FEC) adjustment: EPRA revised the FEC downwards, further contributing to the overall price reduction.
This positive development is expected to provide much-needed financial relief to millions of Kenyan households and businesses.
Lower electricity bills could potentially stimulate economic activity and consumer spending, creating a ripple effect throughout the economy.
While acknowledging the positive impact, industry experts caution that the energy sector remains dynamic, and future price fluctuations are always a possibility.
However, consumers can currently celebrate this welcome reprieve and enjoy the benefits of lower electricity bills.