Why your Kenya Power tokens could soon cost 30% more

Kenya Power has warned that electricity prices could rise sharply if a proposal to introduce wayleave charges on power infrastructure is implemented. 

The company estimates that the charges could increase electricity costs by up to 30%, making power unaffordable for many Kenyans.

Speaking during an engagement with the Kenya Editors Guild, Kenya Power’s Managing Director & CEO, Dr. (Eng.) Joseph Siror, said the proposed charges would significantly impact retail electricity tariffs. 

Under the plan, a fee of Sh200 per meter would be charged on power lines, affecting the company’s vast network of over 319,000 kilometers of power infrastructure.

"The introduction of wayleaves on power lines will impact retail tariffs. Under the proposal, this could translate to an additional Sh63.8 billion per year. This is approximately 30% of the energy sector’s revenue requirements, which must be recovered from monthly electricity bills. The overall effect is that electricity will become unaffordable to a majority of Kenyans," Dr. Siror stated.

He further noted that Section 223 of the Energy Act 2019 prohibits any public entity from imposing levies on public energy infrastructure without regulatory approval. 

He urged stakeholders to reconsider the proposed charges, warning that they would have serious economic implications.

Kenya Power reported that these proposed changes could reverse recent gains that had lowered costs for consumers. 

The company reported a steady decline in electricity costs over the past year.

Dr. Siror attributed this to the strengthening of the Shilling against the US Dollar, which has led to lower forex and fuel costs. 

These expenses are among the key pass-through charges that influence electricity prices.

"This has added to the gains from the decline in the base energy cost following a review of the electricity tariff in April 2023. The three-year tariff structure put in place allows for a lower cost per unit each year. So far, the base tariff has decreased from Sh19.04 per unit in 2023 to the current Sh17.94," Dr. Siror explained.

The company has now called on policymakers and stakeholders to weigh the long-term impact of the charges on electricity affordability and economic stability.

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Kenya Power’s wayleave conflict with Nairobi & other counties

The genesis of Kenya Power's dilemma on wayleave fees involves a long-standing dispute counties, especially with the Nairobi City County Government.

Wayleave refers to the right granted to Kenya Power to lay distribution poles on land held by counties. The landowner charges a fee for this access.

The dispute began in 2007 when Kenya Power challenged Nairobi City Hall's authority to impose wayleave fees. 

Nairobi County claims Kenya Power owes approximately Sh4.8 billion in unpaid wayleave fees from 2016 to 2023, with an additional Sh806.4 million accrued in 2024.

Kenya Power argues that it cannot be charged wayleave fees without the consent of the Cabinet Secretary, as per the Energy Act 2019.

The company also leases its infrastructure to internet service providers (ISPs), generating significant revenue. 

However, Nairobi County argues that this revenue is made without paying wayleave fees to the county.