The Kenya Power and Lighting Company PLC, a publicly listed utility company, has announced that electricity consumers will face additional costs this month due to adjustments in fuel, exchange rate, and water-resource management charges. The Energy and Petroleum Regulatory Authority published three notices in the Kenya Gazette on October 9, announcing the changes that will affect electricity bills. These adjustments do not represent the full price of electricity but rather specific cost adjustments.
The adjustments comprise a Sh3.22 fuel energy cost charge, a Sh0.87 foreign-exchange fluctuation adjustment, and a Sh0.0134 water-resource management levy per kilowatt-hour. Together, they total approximately Sh4.10 per unit. The foreign-exchange adjustment applies to September 2026 meter readings, while the fuel charge and water levy apply to October readings. The combined figure describes these specific cost adjustments and should not be mistaken for the entire electricity tariff.
The largest component of the adjustment is the fuel energy cost charge, which adds Sh3.22 per unit for October readings. Kenya generates most of its electricity from sources such as geothermal, hydro, and wind, but it also uses thermal power plants, particularly when additional generation is needed. Those plants burn fuels such as diesel or heavy fuel oil, and their operating costs can change as fuel prices and generation requirements fluctuate.
The second adjustment is an 87-cent per unit foreign-exchange fluctuation charge. Some costs in Kenya's electricity sector are linked to foreign currency, including payments under certain power-purchase agreements. When the shilling moves against the currencies used in those contracts, the cost of meeting the obligations can change. EPRA's latest calculation recorded a combined foreign-exchange loss of approximately Sh987.56 million across KenGen, Kenya Power, and independent power producers.
The smallest component of the adjustment is the water-resource management levy, which is 1.34 cents per unit, equivalent to Sh0.0134. It is intended to support water-resource management associated with hydropower generation. Its contribution to the combined adjustment is very small compared with the fuel and foreign-exchange charges, but it remains a separate regulated component of electricity pricing.
The arithmetic of the adjustments is straightforward. If all three adjustments applied to 100 units of electricity, their combined value would be about Sh410.34, before the ordinary tariff and other applicable charges and taxes. For 50 units, the same combined calculation would be roughly Sh205.17; for 200 units, about Sh820.68. These illustrations demonstrate how the combined adjustment can affect electricity bills.
The main takeaway from EPRA's October notices is that part of the electricity bill reflects costs that move with fuel prices, exchange rates, and water management. Those adjustments sit alongside the standard tariff and can change each month. The Government of Kenya holds a majority 50.1% stake in Kenya Power, while the remaining 49.9% is owned by private local and foreign investors.
Key points
- The fuel energy cost charge adds Sh3.22 per unit for October readings.
- The foreign-exchange fluctuation adjustment is 87 cents per unit.
- The water-resource management levy is 1.34 cents per unit.
