One third of your fund goes to taxes in the new Kenya Power tariffs

The Sh712.07 will get you 45.07 tokens, the tax being Sh132.66, the fuel index Sh112.66, the forex charge Sh2.25 and the inflation adjustment another Sh2.25
If you send Kenya Power Sh1,000 for electricity tokens, only Sh712.07 will be your actual expenditure while the rest will go to taxes and levies to particular organizations.
This is the result of new tariffs that the ERC announced in July, scrapping the monthly fixed fee of Sh150. The changes have seen low-end users benefit from an 82 percent reduction.
REP gets Sh35.6, WARMA Sh1.16, and the Energy Regulatory Commission Sh1.35.

The actual expenditure accounts for 71.2 percent of the cost, the tax 13.3 percent, the fuel index 11.27, forex 0.23 percent and inflation another 0.23 percent.

REP takes up 3.56 percent, WARMA 0.12 percent and the ERC 0.14.

The levy passed on to the ERC, the regulatory arm of the energy sector, is currently set at three cents per kilowatt hour.
According to Kenya Power, REP’s levy is five percent of the cost of power consumed by a customer. It is passed on to the Rural Electrification Authority (REA) for rural electrification projects.

The share that WARMA (Water Resource Management Authority) gets is for energy purchased from hydropower plants above 1MW.

The Forex adjustment is the foreign exchange component related to the fluctuation of hard currencies against the Kenya shilling for expenditure related to the power sector, for example projects loan repayments.

Prepaid customers pay more than those in the postpaid category.

For example, a consumer whose monthly bill is Sh466 used 21 units, with Sh331.80 as the actual expenditure on the units.

This means the consumer spent Sh15.8 on each unit, Sh72.36 on fuel costs and levies (15.65 percent), Sh61.82 on taxes (13.37 percent) and Sh0.02 on adjustments (0.004 percent).

In a KTN interview on Monday, ERC Chief Executive Officer Pavel Oimeke said the cost of electricity has declined by 14.1 percent.

While noting that the lifeline tariff was changed from consumers of 0 to 50 units to those who use 0 to 10, Pavel explained that Kenyans below living below the poverty line were considered.

“If you consume more than 11 units [per billing period], your cost is much higher because there is no subsidy,” he said, adding Kenyans should pay their taxes and await their August bills and make comparisons instead of speculating.

Low-end users are having it easier as the cost has been loaded on extra charges for those who consume beyond 11kwh within a billing period.

Majority of Kenyans who use an average of 50Kwh of power per month now pay more than double.

Each unit now costs Sh15.80 hence 50Kwh will cost Sh790 plus Sh125 in fuel cost fee and other levies, bringing the total to at least Sh930. This is Sh430 more compared to the previous tariff.

ERC further lowered fuel costs from Sh4.60 per kWh to Sh2.50, forex charge to Sh0.05 from Sh1.22 and inflation fee from Sh0.52 to Sh0.05. It did not change other levies including WARMA and ERC fees.


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