Charles Keter
Consumers Federation
Energy Cabinet
Fuel Cost Charge
ministry last Friday
Stephen Mutoro
The Energy Regulatory Commission
Turkwell and Sondu Miriu

Why power bills should have dropped

The money that consumers pay to power producers who use diesel to generate electricity did not go up throughout last year.

This is even when the drought that hit the country from 2016 continued to bite.

It was only towards the end of last year that the fee, referred to as the Fuel Cost Charge (FCC) incorporated in the monthly power bill started going up.

It reached a three-year high of Sh5.30 per unit of power consumed in March this year just as the long rains began.

And after more than two months of heavy rains that have resulted in an overflow of hydroelectricity dams, consumers still have to contend with huge bills after power agencies only marginally reduced the charges paid to thermal generators.

The Energy Regulatory Commission (ERC), which publishes the fuel charge every month, last week reduced the charge to Sh4.95 per unit for power consumed in May from Sh5.20 per unit in April.

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Following the heavy rains, consumers had expected that the fuel cost charge would go down by a margin bigger than the 25 cents that was offered.

Rains would mean an increase in hydroelectricity power production and consumption and a reduction in the power purchases from the fossil fuel dependent thermal generators.

The cost of acquiring the fuel is passed on to consumers.

Hydropower is the cheapest in Kenya‘s generation mix at Sh3 per unit followed by geothermal at Sh7 per unit, while the thermal power is the most expensive at Sh21 per unit.


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Consumers Federation of Kenya (Cofek) Secretary General Stephen Mutoro said the impact of the rains should have been immediate. “With the amount of rains we have experienced, there is no reason why fuel charge should not have come down by at least 50 per cent for the readings taken in May,” he said.

“Consumers expected nothing less than that.”

Mutoro protested that retaining high fuel cost charge is in addition to numerous other woes experienced by power consumers in the country including the overbilling towards the end of the year. “They have pushed the consumer to a corner,” he said. Power utility firms and energy Ministry had promised a major reduction in the cost of power, following the heavy rains that pushed up the water levels at hydropower dams.

According to the Ministry, the amount of power produced at the Seven Forks hydroelectricity system has gone up.

It is the same case for Turkwell and Sondu Miriu. Masinga Dam, the key reservoir for the Seven Forks scheme, filled up last week and is overflowing. Energy Cabinet Secretary Charles Keter also promised that power prices would come down.

He said the fuel cost charge would come to about Sh2.31, a level it has previously stood at when the hydropower systems were operating at optimum.

“We are now maximising on hydro generation. Hydropower is now accounting for 40 per cent of the power produced in the country. You will see the impact in the next few weeks,” he said, adding that full dams will see electricity costs remain low for the rest of the year.


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“We are safe, these dams will take us to December. Electricity from the hydro and geothermal plants are now accounting for 90 per cent of the generation mix…”

Keter on Friday also told manufacturers that the Government would not issue any new licences to power producers that use diesel to generate electricity.

It will also not renew licences held by the thermal power producers.

A statement by the ministry last Friday said: “The Government has taken a decision not to licence any thermal power plant or renew the licence of stations whose contracts are coming to an end in a more to sustain the low electricity tariffs.”

The challenge, however, is that the contracts are long-term, some extending beyond 2030 and guaranteeing the power producers an income, with charges always borne by the consumer.

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