Kenya has frozen a planned review of electricity prices for the year starting July 1, dealing a blow to efforts to increase revenues for Kenya Power and other utilities in the energy sector.
Energy and Petroleum Cabinet Secretary Opiyo Wandayi said on Wednesday that Kenya Power had withdrawn its application for new tariffs amid concerns that a review could have led to higher electricity costs.
The withdrawal of the tariff application is set to derail efforts to secure additional funding for utilities in the energy sector, raising questions about their ability to deliver key projects if alternative funding sources are not found.
The proposed tariffs could have seen households and businesses pay more for electricity, potentially triggering public backlash at a time when the government is grappling with growing outrage over the cost of living.
Inflation currently stands at a 28-month high of 6.7 percent, recorded last month, and higher electricity prices could have added further pressure on consumer costs.
“Following consultations within government and engagement with key stakeholders in the sector, the retail electricity tariff review application that was submitted on March 31 this year by Kenya Power on behalf of the sector has been withdrawn,” Mr Wandayi said on Wednesday.
“This decision reflects the need to buttress a sustainable energy sector while protecting households, businesses and industries from possible cost escalation.”
The new tariffs were expected to be in force for the three years to June 2029 and were seen as critical to expanding the funding pool for critical projects such as upgrading the electricity transmission and distribution network.
Kenya Power’s decision to withdraw the application comes barely a week after the energy regulator postponed public participation meetings on the proposed tariffs.
The Energy Act, 2019 allows Kenya Power to apply for a review of electricity tariffs every three years. The current tariffs came into force in April 2023 and are due to expire at the end of this month.
