SMES concerned over plans to raise electricity tariffs
By Reuben.Mwambingu, February 13, 2023Small and Medium Enterprises (SMEs) and other stakeholders at the Coast have opposed proposed increment of electricity tariffs. They are now calling on the Energy and Petroleum Regulatory Authority (Epra) to halt the plans.
Speaking during a public hearing workshop on the review of electricity tariffs at a Mombasa hotel at the weekend, the investors warned that any increment on power tariffs will have a devastating impact on the cost of production.
They were concerned that already the current electricity tariffs are a burden to the taxpayer, and therefore a slight increment could bring the country’s economy on its knees.
“And as you are aware we import most of our foodstuffs from neighbouring Tanzania and Uganda. As an investor who relies on electricity to run daily operations, I have had a nasty experience in the midst of the high cost of power, explained Rassam Timimi, who owns Maridadi Millers in Kilifi.
He added: “Just the other day after the cost of electricity went up, I called a client and suggested to him that we are planning to increase the cost of maize milling by Sh1 per kilogramme. The client said fine, if it is so then we will process the grains at the source market in Tanzania.”
Timimi was concerned that the high cost of electricity is fast eroding the gains the country made in industrialisation as investors slither away to neighbouring countries where the cost of power is lower and attractive for business.
“We are staring at the danger of losing major investment opportunities, as very soon we are likely to see industries shift to neighbouring countries because every investment would want to be near a cheap source of power,” he explained.
Assistant Director in charge of energy in Kilifi Wilfred Baya, said reviewing the tariffs upwards will be a bad idea and is likely to make the lives of Kenyans “much more unbearable.”
In the proposed rates expected to take effect from April 1, domestic users and small businesses will face the highest increase as the utility firm seeks to revise the Life-Line consumption band for both from the current 100 kilowatt-hour(kWh) per month to 30kWh per month.
Kenya Power acting Managing Director Geoffrey Muli said the proposal was arrived at following extensive consultation with various stakeholders including power generators and power transmitters.
The acting Director Economic Regulation at Epra Dr John Mutua said the authority will make careful considerations of views from everybody and thereafter the board will sit and decide on reasonable tariffs.
“This is the fourth tariff since we started the first tariff control in 2008,” said Mutua.