The Energy and Petroleum Regulatory Authority (EPRA) has rejected a plan by Kenya Power plan to charge some clients with dollars as well as euros.
The regulator argues that the utility company is currently receiving compensation for dollar fluctuations through forex charges.
Customers buying power are usually charged a forex charge that is used to stabilize foreign exchange fluctuations.
Extra charges are usually channeled for the payment of loans and debts in dollars or euros.
The Kenya Power and Lighting Company (KPLC) plan comes at a time when the Kenyan shilling is losing value against the US dollar.
Currently, for instance, the Kenya shilling trades at a historic low of Sh127.17 against the greenback.
Forex traders attributed the shilling’s weakening to increased dollar demand from oil retailing companies and general goods importers.
The depreciating shilling, despite the growth in reserves, means that dollar supply in the market is lower than dollar demand.
A recent report from the International Monetary Fund (IMF) stated that Kenya is experiencing a tight period of forex demand coupled with reduced liquidity in the interbank foreign exchange market as well as a depreciation of the local currency following the war in Ukraine.
In the half year that ended December 31, 2022, KPLC reported an Sh1.1 billion loss compared to an Sh3.82 billion profit posted in the same period in 2021.
The loss was attributed to increased foreign exchange losses as well as the implementation of a 15% reduction in the end-user electricity tariff in January of last year.
As a result of the tariff reduction, the basic electricity revenue for the six-month period decreased by Sh6.69 billion.
On a positive note, the company recorded a 4.4 percent growth in electricity sales to 4,764 GWh for the period compared to a similar period last year.