The electricity tariff review announced by the Electricity Regulatory Commission (ERC) on June 26, has increased energy cost by a levelised 24% for the commercial and industrial sector before taxes.
The review affected various consumer categories and also changed the tariff structure. According to ERC, the review was intended to improve the quality of power supply and to attract more investments in new power generation, transmission and distribution in a more sustainable manner. ERC adds that the tariff review is based on the average 2007/08 fuel prices and electricity generation mix. The Commission came up with five main consumer categories namely:-
- Domestic Consumers (DC)
- Small Commercial (SC);
- Commercial/Industrial (C11, C12, C13, C13, C14 and C15);
- Interruptible (IT);
- Street Lighting (SL).
Under the new tariff structure, the Commission came up with four main charges namely:-
- Energy charge;
- Fixed charge;
- Demand charge;
- Fuel cost charge.
According to ERC, energy and fixed charges will be levied on each consumer category while the demand charge will be applicable to commercial consumers. In addition, new Foreign Exchange Rates Fluctuations Adjustment (FERFA) formula and new Base Exchange Rates were adopted.
KAM analysis of the impact of the new tariffs reveals a 100% increase across the board for the demand charge, and between 2.5% to 12.75% on the unit charge, for commercial and industrial customers.
Download a brief Tariff Analysis of rates and percentages as it affects commercial consumers. For any further enquiry, please contact Mary Kiema on e-mail: mary.kiema@kam.co.ke or Sylvester Makaka on e-mail: Sylvester.makaka@kam.co.ke
