Utility firm Kenya Power lost Sh3.7 billion from the freeze on surcharges including the fuel cost charge and the foreign exchange rate fluctuation adjustment across six months to last June.
The additional losses for Kenya Power reveal the financial burden the firm faces in supporting the government’s 15 percent reduction in electricity costs last year.
According to the audit of the utility’s books in the year ended June 2022, Kenya Power had revenues of Sh7.3 billion and Sh24.4 billion in relation to foreign cost adjustment and fuel cost charge respectively.
The revenues were, however, against corresponding foreign exchange costs and fuel costs amounting to Sh9.1 billion and Sh26.4 billion.
Read: Kenya Power loses Sh2 billion in tariff discount
“The foreign exchange costs and fuel costs are passed to the customers, hence expected to match. Management has indicated that the variance was due to actual recovery rates approved by the Energy and Petroleum Regulatory Authority for billing to customers, being lower than the actual rates applied at the point of purchasing power from the producers,” noted the Auditor-General.
Surcharges on customer billings remained unchanged between December 2021 and last August at Sh4.63 per unit and 73 cents respectively, anchoring the State-backed subsidy on electricity bills.
