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{
    "id": 111955,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/111955/?format=api",
    "text_counter": 12,
    "type": "other",
    "speaker_name": "",
    "speaker_title": "",
    "speaker": null,
    "content": "on the electricity tariffs to raise the needed own contribution. It is good to note that with this borrowing we have been able to cushion the tariff. Between 31st December, 2008 and 31st December, 2009, the fixed assets rose by Kshs12 billion mainly in form of investments of upgrading and extending the electricity infrastructure. In the six months period, June to December, 2009, the additional assets in distribution infrastructure, including works in progress and loans repayments were in excess of Kshs6.6 billion. The Kshs1.873 billion after tax profit was, therefore, just about the required internally generated funds (25 per cent) to enable the KPLC undertake these important works and service the loans under payment. Mr. Speaker, Sir, you may wish to note that in the same period under review only Kshs237,384,000 of the profit was paid out as dividends to the shareholders, with the bulk of the profit retained and ploughed back to upgrade and expand the power distribution network. The KPLC has already begun to reduce the charges as evidenced by the drop in the fuel cost charge from Kshs7.90 per Kwh in November, 2009 to Kshs7.49 per Kwh in March 2010. The level and pace of further reduction by the KPLC will be determined by the intensity of the expected long rains in the Tana River catchment. If we do not get sufficient long rains, these slight gains may be reversed. On the other hand, if we receive heavy long rains, we will further reduce the emergency power capacity with the resultant reduction in the cost of electricity to consumers. Finally, I would like to inform this House that the entire emergency power which is about 250 megawatts is programmed for removal from our power generation system by March, 2011. This measure will result in a substantial fuel cost charge reduction as cheaper plants will have been commissioned by then. If you have a look at your electricity bill, you will notice that the cost of fuel is more than the cost of consumption. Therefore, as a Ministry, in this year’s Budget, we apportioned Kshs 5 billion for the development of geothermal power. At the end of this year, geothermal power will generate almost 60 megawatts which will reduce the cost of fuel. With regard to transmission, we allocated Kshs5 billion in the Budget. For distribution through the Rural Electricity Authority (REA), we allocated another Kshs5 billion. That means that from the Exchequer we have spent Kshs15 billion so that we can improve on the generation and save on fuel, which is very high. This is what has made the tariff to be high. Had electricity been mainly generated through hydro plants, it would only cost Kshs5 per megawatt."
}