Kenya Power Promises to Slash Your Bills in New Push

Firm wants fixed charges reduced in contracts with power generators

Kenya Power and Lighting Company is promising consumer’s reduced bills as it looks to review its controversial contracts with power generating companies.

The firm wants fixed charges lowered in contracts signed with electricity generating companies. According to the Auditor General, the management has identified capacity charges among the costs it wants to reduce.

Kenya Power Managing Director Bernard Ngugi further confirmed that they expected the push to result in cheaper power for consumers.

The capacity charges, meant to help companies recoup their multi-billion shilling investments are recovered for consumers and have long been blamed for much of Kenya Power’s losses – as they are tied into long term Power Purchase Agreements (PPAs). Other costs weighing the firm down include infrastructure maintenance costs, remuneration and interest on loans.

“Management indicated that plans are underway to renegotiate downwards the capacity charges on the existing power purchase agreements (PPAs).

“These charges, which account for 54 per cent of the total cost of sales are significant and, considering their fixed nature, may have adversely affected the company’s performance resulting in losses,” the Auditor-General noted in its report on Kenya Power’s financial statements for the year ended June 2020.

Kenya Power CEO Bernard Ngugi at a past event. Capacity charges paid to electricity generating companies have been blamed for its losses.
Kenya Power CEO Bernard Ngugi at a past event. Capacity charges paid to electricity generating companies have been blamed for its losses.

Kengen, OrPower, Lake Turkana account for 79 percent of the firm’s bulk electricity purchase costs. The state-owned monopoly purchases power from up to 20 different generating companies.

READ ALSO>>>>>Kenya Power to Install Solar Panels as Consumers’ Shift Threatens Revenues

Ngugi noted that the firms would have to give up a piece of their profits pie for the larger good of the economy.

“It’s obvious that if the cost of electricity from generators comes down, the same will go to the economy or wananchi/customers by the regulator also reviewing the retail tariff downwards.

“It would be very good if the economy gets the benefit of cheaper power to spur growth through manufacturing that heavily relies on electricity rather than merely to think of electricity players making money,” he told Business Daily.

A previous push by Kenya Power to cut bulk electricity prices citing low demand following the onset of the Covid-19 pandemic was met with stiff resistance from generators including Iberafrica, Tsavo Power and Gulf Power.

READ>>>>>Places Where Kenya Power Plans to Install Electric Car Charging Stations

Latest

Whipped and Stripped! A Survivor’s Tale of Harrowing Brutality in a Mental Hospital

The lack of a long-term vision and inadequate resourcing of mental hospital infrastructures continues to take a toll on Kenya’s mentally ill patients.

Dubai Agency Picks Top Influencer Marketers to Lead Kenyan Operation

This strategic move is in line with indaHash vision to cement its presence in Africa, following its impactful footprint in South Africa since 2017 and successful collaborations with clients like the South African Tourism Board.

SportPesa to reward Customers in Cash-Filled Festive Promotion

Running from December 4th to 25th, the SportPesa campaign promises daily excitement with six lucky winners expected to walk away with Ksh5,000 daily.

Captain William Ruto: President’s Namesake With a Decorated Career

Captain William Kipkemboi Ruto is officially known by the name William Ruto, which also happens to be President William Samoei Ruto’s official name.

Follow Us

Newsletter

Don't miss

Tusker Oktobafest Rolls East African Cultures into One

From regional events across Kenya to inaugural gatherings in Uganda and Tanzania, and the Tusker Oktobafest grand finale in Nairobi, the festival harmonized traditions, celebrated diversity, and highlighted the rich cultural tapestry of the East African culture

Lupita’s Little Brother Junior Nyong’o Charting His Own Path in Acting

Junior Nyongó, who is also a musician and a DJ and now a graduate of UC San Diego with an MFA in Acting, is crafting his own solid path in the world of acting with roles in major theatre productions.

Safaricom To Power Tusker OktobaFest Beer Festival

Safaricom’s involvement in OktobaFest as a technology and payments partner will focus on fostering seamless in-festival connectivity, empowering the youth and Gen Z community through Safaricom Hook, and powering digital payments through M-PESA.

Music Producers Launch Organization To Streamline Recording Industry

Recording Industry of Kenya (RIKE) was launched on 9th October 2023. Registered in 2022 as a not-for-profit organization, RIKE aims to promote the collective interests of producers of sound recordings in the country.

Nairobi’s Hero Bar Listed Among World’s 50 Best Bars

World Best Bars: Hero Bar in Nairobi continues to climb the list, moving up six places to No.62 and Johannesburg’s Sin + Tax comes in at No.94. Dubai new entry Ergo is at No.69 and Melbourne’s Byrdi has re-entered the list at No.61.

Kenyan DJs Face Off In Smirnoff Battle Of The Beats Season 3

The Smirnoff Battle of the Beats Season 3, a DJ competition, is poised to unleash an unprecedented musical frenzy countrywide.

The Highs And Lows Of Betty Kyallo, Sisters Show As Season 2 Ends

Kyallo Kulture has always been, above all, about sisterhood, and in Season 2 we have witnessed the charm of it - the ups that gave us wholesome moments as the sisters led by Betty Kyallo spent time together.

DStv Beats CNN, BBC To Become Most Admired Media Outlet In Africa

DStv, MultiChoice Group’s leading broadcast service, has been named...

MultiChoice Revises Subscription Fees For DStv, GOtv

MultiChoice has announced price adjustments on some of their...

Octopizzo: How I Make My Money

"I've been doing this for 12, 13 years. It reaches a point where you no longer need to prove that you can make a hit record," he stated.
MARTIN SIELE
MARTIN SIELEhttps://loud.co.ke/
Martin K.N Siele is the Content Lead at Business Today. He is also a Quartz contributor and a 2021 Baraza Media Lab-Fringe Graph Data Storytelling Fellow. Passionate about digital media, sports and entertainment, Siele also founded Loud.co.ke

Whipped and Stripped! A Survivor’s Tale of Harrowing Brutality in a Mental Hospital

The lack of a long-term vision and inadequate resourcing of mental hospital infrastructures continues to take a toll on Kenya’s mentally ill patients.

Dubai Agency Picks Top Influencer Marketers to Lead Kenyan Operation

This strategic move is in line with indaHash vision to cement its presence in Africa, following its impactful footprint in South Africa since 2017 and successful collaborations with clients like the South African Tourism Board.

SportPesa to reward Customers in Cash-Filled Festive Promotion

Running from December 4th to 25th, the SportPesa campaign promises daily excitement with six lucky winners expected to walk away with Ksh5,000 daily.

LEAVE A REPLY

Please enter your comment!
Please enter your name here