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Electricity prices rise marginally on fuel charge
The FCC on a kilowatt hour (kWh) of electricity rose from Sh3.36 in February to Sh3.49 in March, the Energy and Petroleum Regulatory Authority (Epra) announced.
Power prices have jumped marginally following the rise of fuel cost charge (FCC) on electricity in March, which will see households get fewer tokens for the same amount spent on electricity bills.
The FCC on a kilowatt hour (kWh) of electricity rose from Sh3.36 in February to Sh3.49 in March, the Energy and Petroleum Regulatory Authority (Epra) announced.
“Pursuant to Clause 1 of Part III of the Schedule of Tariffs 2023, notice is given that all prices for electrical energy specified in Part II of the said Schedule, will be liable to a fuel energy cost charge of plus 349 Kenya cents (Sh3.49) per kWh for all meter readings to be taken in March, 2025,” Epra stated.
The rise in the FCC in March marks the first time that the charge has resumed a rising trend since it started falling in November last year. Between November 2024 and February 2025, the fuel cost charge dropped from Sh3.72 to Sh3.36 per kWh.
When the FCC dropped to Sh3.36 per kWh last month, Epra said the impact resulted in a reprieve of Sh0.27 per unit.
“The net effect is that end-user tariffs will decrease by Sh0.27 kilowatt per hour plus 16 percent VAT across all categories,” Epra said at the time.
Electricity prices had been falling on account of declines in the FCC and foreign exchange (FX) charge over the four months from November 2024, but the rise of FCC is now expected to have an impact on the value of money households and businesses spend on electricity.
FCC and forex are the two biggest pass-through costs, which alongside the gazetted electricity tariffs, determine power bills that consumers pay monthly.
FCC is collected by Kenya Power to pay power plants that use diesel to generate electricity while forex adjustment is a charge that is used to service foreign currency loans used to finance construction of the plants.
Reduced power bills are key to driving electricity demand and ultimately boosting Kenya Power’s electricity sales.
Majority of the power plants requiring diesel for power generation are the thermal plants, which are also most expensive to run. Kenya has since March recorded significant jumps in hydro-power generation, following heavy rains.
Hydro is the cheapest source of power in the national energy mix, highlighting why increased production from the dams is key to lowering power bills.
