- Kenya Power has raised concerns that the recent drop in electricity costs may be short-lived.
- The issue of wayleave charges has sparked debate, with stakeholders raising concerns about the potential ripple effects on businesses and households.
Kenya Power has raised concerns that the recent drop in electricity costs may be short-lived if a dispute with the Nairobi County Government over wayleave charges escalates.
Kenya Power Managing Director Joseph Siror attributed the decline in power prices to the strengthening of the Kenyan shilling against the dollar. He explained that the improved exchange rate had helped lower pass-through costs for consumers.
“The base tariff has dropped from Ksh19.04 per unit in 2023 to Ksh17.94 per unit in 2024,” Siror stated. “This has added to the gains from the decline in the base energy cost following a review of the electricity tariff in April 2023, which put a three-year tariff structure in place.”
However, Siror warned that power costs could rise significantly if county governments impose wayleave charges on electricity infrastructure. Wayleave fees are payments for using land to set up power lines and other utilities. He noted that Kenya Power operates over 319,000 kilometres of power lines across the country, and the proposed changes would significantly impact electricity tariffs.
“Under the proposal to charge wayleaves on electricity infrastructure at a cost of Ksh200 per meter, this translates into Ksh63.8 billion per year,” Siror explained. “This additional cost would have to be recovered through electricity bills, making power unaffordable for most Kenyans.”
He cautioned that the proposed charges could push electricity prices up by as much as 30 per cent, undermining the recent reductions in power tariffs.
“The overall impact is that electricity will become unaffordable for the majority of Kenyans,” he said.
The issue of wayleave charges has sparked debate, with stakeholders raising concerns about the potential ripple effects on businesses and households. As discussions continue, consumers remain watchful of any changes that could affect electricity affordability.