Kenya enters a new dawn after the Energy Regulatory Commission unveiled new electricity tariffs which scrapped the contentious standing charges.
The move will significantly reduce the cost of living especially among the low-income earners and ease the cost of doing business. Kenyans agree that the tariffs review was long overdue.
The commission scraped the Sh150 standing charge on electricity, after five years of public outcry, to ease the burden on consumers. Subsequently, the overall unit cost of power dropped from Sh17.77 per kilowatt per hour to Sh16.64 per kilowatt per hour, a reduction of 6.9 per cent.
In the new deal customers will only be paying for the units consumed, starting with the July billing cycle. Lifeline tariff consumption units reduced from 50kWh per billing period to 10kWh to ease costs.
The review addresses numerous complaints from domestic customers on the complexity of the tariff billing regime which was difficult to understand.
This was mostly the case for prepaid customers who would receive varying tokens for the same amount of money within a billing cycle due to the graduated tariff structure and the fixed charges.
On average, commercial and industrial customers will also get a 4.4 per cent reduction, in addition to the 50 per cent discount under the Time of Use Tariffs recently launched.
The current electricity tariff has been operational since 2013 and had seen consumers pay the fixed standing charges monthly on top of actual consumed units.
The commission’s move is likely to make spikes in monthly electricity prices a thing of the past.
In recent months, the cost of electricity has continued to shoot even as the weather improved, piling pressure on businesses and impacting adversely on cost of living.
The pain hit bottom-end power users the hardest as their bills surged by several percentage points beyond expected averages.
It is, therefore, hoped that manufacturers will pass down the reduced charges to consumers and reduce the cost of goods and services.
This could increase consumption and create more demand for commodities, enhancing favourable business environment in the country.