ERC to lower power tariffs for SMEs

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The Energy Regulatory Commission logo as seen at Eagle Africa Centre
The Energy Regulatory Commission (ERC) logo as seen at Eagle Africa Centre. PHOTO/COURTESY

The Energy Regulatory Commission (ERC) is planning to introduce cheaper tariffs for SMEs in adherence to President Uhuru’s Kenyatta last week directive to lower the cost of electricity for the businesses.

According to Energy Cabinet Secretary Charles Keter, once the tariff revision is finalized, SMEs will buy a single power unit at Ksh. 21.95 from the present Ksh. 25.08. This translates to a decrease of approximately 12.48 per cent.

According to a local daily, Keter subsequently revealed the tariff revision was necessary since August reviews by the regulator put SMEs and household consumers in the same category.

“ERC is relooking into the SMEs tariffs because some ended up in the domestic ordinary category whose tariff went up in the recent revision,” Mr Keter is quoted as saying by the local daily.

August’s power review by ERC categorized SMEs in the ‘domestic ordinary’ category instead of the ‘small commercial’ category. As such, the small businesses did not get lower power rates with many SMEs citing an 82.9 per cent increase in power bills.

Similarly, without going into detail, Mr. Keter disclosed that “domestic consumer” rates will also be revised.

“ERC is also looking into their tariff class since they are the most affected. However, any changes made, if any, will not affect our revenue collection,” the CS added

President Uhuru Kenyatta last week during an SME forum hosted at Strathmore Business School, directed the Energy Cabinet Secretary to ‘review electricity tariffs and come up with a sustainable plan to ensure the cost of power to small and medium-sized enterprises goes down.’

According to the Kenya National Bureau of Statistics, there are more than 17 million SMEs registered in Kenya, with 98 per cent of them contributing to 25 per cent of the country’s Gross Domestic Product.

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