The adjustment of Ferfa could see Kenya Power book an extra Ksh.699 million in revenue from September bills should the sales remain the same as those recorded in August 2022
By Lavin Atieno
The Kenya Power and Lighting Company’s net profit is projected to be worth Ksh. 700 million after the energy transmitter and retailer increased its foreign exchange charges on electricity bills. The Energy and Petroleum Regulatory Authority (EPRA) nearly doubled the foreign exchange fluctuation adjustment (Ferfa) to Ksh1.36, up from 73 cents, to cater for the weakening of the Kenyan shilling against the US dollar.
The adjustment of Ferfa could see Kenya Power book an extra Ksh.699 million in revenue from September bills should the sales remain the same as those recorded in August. Electricity bills went up in September after the government removed the 15% subsidy that was put in place by former President Uhuru Kenyatta.
The price increase negates the gains consumers had made in January after the Energy and Petroleum Regulatory Authority (EPRA) cut the cost of electricity. The former president is said to have failed to achieve his pledge of reducing power costs by another 15% after failing to finish re-negotiations with Independent Power Producers (IPPs) before his exit.
The removal of the electricity and fuel subsidies come as a result of policy change by President William Ruto’s new government on grounds that such subsidies lead to product shortages. Petrol prices hit a historic high of Ksh. 179.3 per litre last week. The price of diesel shot up to Ksh165 from Sh140.03, even as that of kerosene jumped to Sh147.94 per litre after EPRA increased its cost by Ksh. 20, transportation, electricity generation and agriculture are all dependent on diesel.
Kenya Power could receive a bigger boost to its revenue should EPRA approve an application for a tariff review it plans to submit between October and December as part of a strategy to help it climb out of the financial hole created by the power price cut in January.
