Homes and businesses face new electricity tariffs after Kenya Power submitted proposed new prices that are expected to come into effect from July 1 this year.
Joseph Oketch, the acting director-general of the Energy and Petroleum Regulatory Authority (Epra), disclosed that review meetings have already started for the tariffs, where Kenya Power and other State energy agencies are seeking increased funding for critical projects and operations.
New tariffs could see consumers pay more for electricity if Epra agrees to hike the tariffs and hand Kenya Power and other State energy agencies more cash for projects in the sector, besides freeing more money to compensate power producers.
Kenya Power’s proposed tariffs remain undisclosed, but the electricity distribution monopoly is seeking more funds for critical projects, notably the upgrading of the ageing and overstretched network, which has been blamed for blackouts.
‘They (Kenya Power) did submit and we have started stakeholder meetings as required under the law. There are key issues to consider like the revenue requirements for the sector, system losses and how to balance all these,’ Dr Oketch said.
‘Remember, we must take into consideration the views of Kenyans during the public participation as we consider the revenue requirements for the sector.’
Tariff cycle
Electricity prices have declined over the three-year tariff cycle, with 200kWh retailing at Sh5,656.88 last month compared to Sh6,349.80 in April 2023, while the cost of 50kWh has dipped to Sh1,288.99 from Sh1,304.92 over the period, according to official data.
The Energy Act 2019 allows Kenya Power to seek a review of the tariffs every three years to help the State energy utilities match the rising cost of undertaking projects, operations and maintenance. The last time Epra reviewed electricity tariffs was in April 2023, after a lull of five years.
The current review will allow Kenya Power and other energy utilities to plug the revenue gaps triggered by the year-on-year drop in base tariff from July 2024 to June 2026.
Base tariff (consumption charge) refers to the price of a kilowatt-hour (kWh) of electricity and is the single biggest determinant of power bills. It remains unchanged throughout the gazetted period.
Pass-through costs like fuel cost charge (FCC), forex adjustment charge, Value Added Tax (VAT), inflation adjustment charge, energy regulatory levy, Rural Electrification Authority levy, and a levy for the water regulatory agency are the other variables that determine power bills.
The revenues are key to critical projects like revamping the electricity transmission and distribution network and rural electrification schemes.
The new tariffs will directly impact revenues for State agencies such as Kenya Power, Rural Electrification and Renewable Energy Corporation, Kenya Electricity Transmission Company, Kenya Electricity Generation Company and independent power producers.
Epra increased tariffs in the first year of the current tariff cycle but subsequently lowered them in the last two years, hitting Kenya Power’s revenues in the year ended June 2025 despite an increase in unit sales.
Kenya Power made revenues of Sh219.28 billion in the year to June 2025, a drop of Sh11.84 billion from the previous year despite electricity sales jumping by 887 gigawatt-hours (GWh) to 11,403GWh, underscoring the impact of the reduced tariffs.
‘In parallel, the regulated tariff, structured with declining average yields in accordance with sector revenue requirements, constrained topline growth,’ Kenya Power said in a commentary on its revenues for the year ended June 2025.
Joseph Siror, the managing director of Kenya Power, recently said that consumer tariffs fell by an average of nearly Sh2 per unit between April 2023 and June 2025, directly hitting Kenya Power despite the increased electricity sales.
Distribution network
Increased revenues are critical to Kenya Power’s efforts to bolster the distribution network and enable the lines to handle increased demand from homes and businesses, thereby avoiding instances of outages attributed to a constrained network.
In the current tariffs that took effect in April 2023, Epra increased the consumption charge across all consumer bands in the year ended June 2024. The tariffs then dropped marginally in the next two years.
Epra also introduced electric vehicle (EV) tariffs besides slashing the consumption threshold for lifeline consumers to not more than 30kWh a month from the previous 100kWh.
The new tariffs will be in place for the next three financial years to June 2029, in line with the law that provides for a three-year cycle of gazetted tariffs. The tariffs are also based on forecast demand for electricity, with Kenya Power exposed in case of a huge variance between projected and actual demand.