Kenya Power and Lightning Company (KPLC) has received authorization from the Energy and Petroleum Regulatory Authority (EPRA) to recover KES 548 million, which it missed due to the tariff reduction initiated by former President Uhuru Kenyatta, from the electricity bills of the current month.
EPRA’s decision allows KPLC to recoup KES 6.5 billion lost during the implementation of a 15% tariff reduction in January 2022, a measure that was extended by President William Ruto until March 2023.
The initial tariff cut resulted in a revenue loss of KES 26 billion, and the extension incurred an additional loss of KES 6.5 billion. To offset this financial setback, EPRA permitted KPLC to recover the funds gradually through customer bills.
The current KES 548 million recovery represents the second installment in a series of 12. EPRA explained that the reduction in electricity prices for February, amounting to KES 3.4 per unit, would have been more substantial if not for the ongoing recovery efforts. This decrease is attributed to a notable decrease in forex adjustments due to reduced foreign currency exchange payments in January 2023.
Initially, the KES 26 billion revenue loss was distributed among various energy sector entities, with the government providing reimbursements to KPLC.
Kenya Electricity Generating Company (KenGen) offered a KES 3.5 billion discount, Kenya Electricity Transmission Company provided an KES 800 million discount, and the Geothermal Development Company assumed KES 500 million of the burden.
Taking into account the revenue losses from tariff cuts and forex fluctuations, KPLC reported a net loss of KES 3.19 billion for the financial year ending June 2023.