BUSINESS DAILY: The energy sector regulator has shot down a Kenya Power application for electricity tariff increase that would have seen consumers’ bills increase by Sh2.6 billion every month.

This is the second time since last year that Kenya Power has unsuccessfully sought approval of the Energy Regulatory Commission (ERC) to raise power charges.

The electricity distributor says a tariff increase is necessary to cover surging costs from increased customer connections and power leakages on its ageing infrastructure.

“At this point, there is nothing that justifies any power increment,” said ERC acting director-general Pavel Oimeke while confirming that Kenya Power had submitted an application for tariff review.

"While ruling out any increment, Mr Oimeke said that the utility firm should instead boost efficiency in its operations by slashing system losses to grow its bottom-line.

The NSE-listed electricity company had last year presented to the ERC a tariff increase proposal, asking for its implementation from July 2016, but it was denied.

The company reverted to the ERC this year, presenting yet another proposal on why power bills should rise.

The Kenya Power managing director Ken Tarus in an interview said the company had suggested an average increment of about Sh3.1 ($0.03) per kilowatt (kWh) across different customers’ consumption bands.

If granted, this would have seen consumers fork out an additional Sh2.6 billion per month, based on Kenya’s monthly average consumption of 830 million units.

Power tariff adjustments are ordinarily done after every three years and can either rise or fall depending on market dynamics.

The government has been keen on keeping the cost of power on a downward trajectory to improve Kenya’s competitiveness as a business hub.

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