Increase in electricity prices

In October 2022, Kenya Power and Lighting Company (Kenya Power) made a tariff review application to EPRA for higher energy charge tariffs that are expected to take effect on April 2023. In the proposed rates, domestic users and small businesses will face the highest increase as the utility firm seeks to revise the Life-Line consumption band for both from the current 100kWh per month to 30kWh per month. The revision is expected to align the objectives of the social tariff customer category with the correct social class normally defined by level of income.

For instance, currently, domestic consumers of electricity pay Sh10 per kwh for using between 0 to 100 kilowatts(kw) with those consuming upwards of 100kWh paying Sh15.80 per kilowatt. In the proposed tariffs, domestic consumers will pay Sh14 per kWh for up to 30 kilowatts of power while those exceeding 30kWh per month will be expected to pay Sh21.68/kWh, a figure which is set to drop to Sh20.61 in July 2024.

Large power consumers are also set to pay more under the proposed tariff schedules. For instance, large power consumers categorized as Commercial Industrial I will pay Sh16.48 per kWh up from Sh12. For firms falling under the Commercial Industrial V, which is made up of a few but very heavy users, the cost per kWh will increase from Sh10.10 to Sh13.90. According to KPLC, the rationale of this Retail Tariff Review is to incorporate changes in Electricity Sub-sector cost structure and update key assumptions with the aim of providing adequate sector revenue requirements. If implemented, the higher tariffs will increase the cost of living and doing business in Kenya. Consequently, this may spur the uptake of renewable energy technologies, i.e., solar energy, especially among commercial and industrial consumers which will result in increased business opportunities.