Power cost drops as shilling stabilises against the dollar


Electricity consumers will this month get a slight relief following the shilling’s slight stability against the dollar and drop of fuel prices.

In a gazette notice published Friday, the Energy Regulatory Commission (ERC) reduced variable components of the monthly electricity bills. Fuel cost has dropped from Sh2.56 to Sh2.51 while forex adjustment charges have dropped from Sh1.99 to Sh1.06 per unit of electricity.

“Notice is given that all prices for electrical energy will be liable to a fuel cost charge of plus Sh251 cents per kWh and a foreign exchange fluctuation adjustment of plus 106 cents per kWh for all meter readings taken in November,” ERC said in the notice.

On Wednesday, ERC reduced the price of diesel by Sh2.77 per litre in Nairobi. The prices of super petrol and kerosene also went down by Sh2.83 and Sh1.23 per litre respectively.

The two components are revised every month to recover money spent by power generating companies to purchase diesel to run thermal generators and importation of equipment for production of power.

Despite increased investment in geothermal power generation, the country still relies on diesel-driven thermal generators to meet the existing electricity supply deficit.

Data from the ERC indicates that 101 million units of thermal electricity were consumed last month, accounting for 12 per cent of the country’s total electricity consumption during the period.

Geothermal power consumption hit a record high with 402.1 million units consumed, the highest ever, accounting for 49 per cent of the total consumption.

High energy costs have in the past been linked to inflation as manufacturers adjust prices of goods to meet the high costs of operation.