KAM estimates show that electricity cost for industrial users has gone up by approximately 40% due to increase in the fuel cost component. Small commercial consumers who include offices and small businesses with consumption above 1500 KWH will now pay an average of Ksh 13.38/KWH consumed, up from Ksh 9.29 in June. Small industries will be hurt most by the increase of fuel charge and non-fuel energy cost. The least affected are the large commercial consumers on CI-3 category, who will pay an average of Ksh 11.77, up from Kshs 8.77 in June.

Since January 2008, cost adjustment on the fuel component alone has gone up by approximately 300%.

This is caused by increased utilization of thermal power generation following the commissioning of the 110MW emergency power plant at Embakasi on On June 7 for an additional 50 MW, and the shut down of the Kiambere hydro unit for refurbishment . The move increased thermal power plants generation from 177,804,123 KWH to 194,561,134 KWH in June.

The total emergency power capacity now stands at 150 MW up from 100MW, including Eldoret’s 40MW emergency power plant. The committed total capacity for emergency power generation for the country is 180MW. If need arises, the remaining 30 MW will be put up in Lanet, Nakuru.

We expect the situation to improve after the refurbishment of Kiambere is completed, which will realize an additional 20MW capacity of hydro power added to the national grid.

Although we had warned industry to expect to pay more for energy, the current cost adjustment is more that we anticipated.

Below is an average analysis of the tariff review impact less tax.

Fore more information contact: sylvester.makaka@kam.co.ke