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Kenya Power backs special levy to run street lights
Kenya Power Managing Director Joseph Siror during the release of the company's half year financial results at Stima Plaza in Nairobi on January 31, 2025.
Kenya Power has backed a proposed levy to fund the county street lighting projects in a bid to spur economic growth and help the company avoid tussles with counties over unpaid bills.
Kenya Power chief executive Joseph Siror said that the levy, known as the Street Lighting Infrastructural Support Levy (SLISL), could be introduced but in cents to avoid triggering an increase in electricity prices.
“If we evaluate, it might not even reach Sh0.10 per unit and this means its effect will be very minimal. The impact on bills will be near zero. This levy can never be in shillings, it can only be in cents, but the overall good to the economy will be immense,” Dr Siror told the Business Daily.
“I support it because we have challenges in collecting bills and the push and pull with counties over debts does not help us,” he added.
The National Assembly departmental committee on energy proposed the introduction of SLISL to fund street lighting across the 47 counties and ensure that Kenya Power is embroiled in disputes with the devolved units over unpaid bills for the project.
Kenya Power is grappling with increased costs from the project, with unpaid street lighting bills rising to Sh808.6 million in the year ended June 2024 from Sh641.8 million a year earlier.
Collecting bills from counties is far from straightforward.
For example, in a protracted dispute with Nairobi County over electricity debts, including for street lighting, county officials dumped garbage, cut off water and blocked sewers at Kenya Power offices in retaliation after the firm company cut power to some county offices.
Electricity bills in Kenya currently include seven taxes and levies, with the largest being the fuel cost charge (FCC), and there are fears that the introduction of the SLISL will hit consumers.
Others are the 16 percent value added tax, forex adjustment levy, rural electrification levy, inflation charge, water resources authority levy and the energy sector levy.
The street lighting project was started in 2014 to provide adequate public lighting for industrial and residential areas, commercial centres, roads, railways, and public transport and to promote a 24-hour economy.
Electricity prices in the street lighting band are discounted and are the lowest among all consumption categories, except for the special economic zone tariffs and the time-of-use tariffs.
A unit of electricity for street lighting costs Sh9.23 and this will fall to Sh9.15 in the year starting July 2025. The discounting the prices for street lighting bills is meant to encourage the installation of street lights in all counties.
The introduction of SLISL will be yet another area in the energy sector where the government is taxing consumers of a product to directly fund a project.
For example, motorists pay the road maintenance levy at Sh25 per litre of petrol and diesel to raise billions for road development.
There is also the Sh5.40 petroleum development levy charged on every litre of fuel, which is used to stabilise pump prices and upgrade infrastructure in the petroleum sector, among other things.
