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{
    "id": 663033,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/663033/?format=api",
    "text_counter": 14,
    "type": "other",
    "speaker_name": "",
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    "speaker": null,
    "content": "unchanged as shown in Part (2)(c), page No.8 of the approved schedule attached. Additionally, the pass- through costs, namely; the fuel cost charge, the foreign exchange rate fluctuation adjustment, water resource management levy and inflation adjustments have remained constant since January 2016 to date. The table below has a summary as follows; the fuel cost charges has remained at Kshs200.31. The foreign exchange rate fluctuation adjustment has remained at Kshs100.00. The water resource management levy has remained at Kshs0.50 while the inflation adjustments have remained at Kshs29.00. The other charges to be added to the taxes and levies which have remained unchanged during the same period; the value added tax at 16 per cent, the rural electrification programme at 5 per cent of revenue from unit sales and energy regulatory commission levy at Kshs0.30 per kilo watt. Any change to the billing amounts is due to the customer’s consumption quantities. An analysis of sample domestic and small commercial bills from KPLC systems have been provided for comparison purposes. These have indicated that the bills have fluctuated due to consumption patterns. Mr. Speaker, Sir, Sen. Obure further wanted the Chairperson to explain the measures that the Government intends to put in place to abolish the numerous charges loaded onto electricity bills such as fuel cost, forex adjustment, inflation adjustments and maximum month deviations, among other charges. The response is as follows:- Regarding Approved Schedules; the tariffs were approved in 2013 and adopted. This structure will remain in force for three years. These have two components, basically the base tariff that is the fixed charge, energy charge and the demand charge, then the pass-through costs. I have explained the Fuel Cost Charges (FCC), the Foreign Exchange Rate Fluctuation Adjustments (FERFA), the Water Resource Management Authority Levy (WRMA) charges and the Inflation Adjustments (INFL). These are pass-through costs. The electricity prices are reviewed normally for a three-year term in line with the existing tariff review policy. In the meantime, variable input prices are affected by consumer price indices; internationally and locally. Regarding the exchange rates, authority charges and fuel price fluctuations, the fluctuations of the above mentioned parameters form the basis of the pass-through costs. While efforts are being made to ensure predictability and reduce variations of the pass- through costs, it is important to ensure that the electricity prices are reflective of the costs and that Kenya Power’s financial integrity is maintained. The next item is part (d) which required me to explain what the Government is doing to ensure institutions that are charged with the mandate of energy generation and distribution are working effectively to provide affordable reliable power supply. Under the Government’s plan to add 5000 megawatts to the national grid by 2017, the Government identified and allocated KenGen to deliver 844 megawatts. Of this target, KenGen has already delivered 385 megawatts through geothermal energy. Among the projects commissioned are Olkaria I and IV which have already delivered 280 megawatts. This has an overall impact because what has been delivered by these two projects is at seven US cents. These projects were commissioned in 2014 as per the attached schedule. The electronic version of the Senate Hansard Report is for information purposes only. A certified version of this Report can be obtained from the Hansard Editor, Senate"
}