Parliament wants you to start paying for Kenya Power’s rural electrification shortfall, and if regulators agree, your electricity costs are about to climb higher.
The National Assembly Committee on Energy has directed the Energy and Petroleum Regulatory Authority to create a new recovery mechanism that would force all electricity consumers to cover the losses Kenya Power racks up maintaining power infrastructure in rural areas.
The committee wants this built into the base tariff starting July 2026, as per a report by Business Daily.
Here’s the problem: Kenya Power has been extending electricity to rural communities for decades, but the Treasury was supposed to reimburse the company for these expenses since rural customers don’t use enough power to make the projects financially viable.
Rural households average just KES 217 per month on their electricity bills, compared to the national household average of KES 830. That gap has left Kenya Power unable to recover what it spends building and maintaining rural grids.
The Treasury owes Kenya Power KES 29.9 billion for rural electrification as of June 2024, and that number keeps growing. Out of KES 30.7 billion owed before a recent partial payment, the government has only reimbursed KES 810 million. Another KES 19 billion approved by the Cabinet remains unpaid.
Parliament’s solution is to stop waiting for the Treasury and make consumers cover the deficit through their monthly bills instead. This would happen through adjustments to the base tariff, which is already the largest component of your electricity bill and determines what you pay per kilowatt-hour of power.
EPRA’s Director-General Daniel Kiptoo isn’t convinced this is the right move. He questioned whether it’s fair to force consumers to pay for commitments the government made to Kenya Power and said the regulator needs legal advice from the Attorney General on whether Parliament’s directive is even binding given the separation of powers between branches of government.
READ: Kenya Power To Compensate Customers For Extended Blackouts in Proposed Rules
You already pay a rural electrification levy as one of eight separate charges on your electricity bill, along with things like fuel costs, foreign exchange fees, inflation adjustments, and a 16% VAT. Adding another recovery mechanism on top of existing charges would directly increase what everyone pays for electricity.
The Ministry of Energy recently warned against introducing new levies that could spike electricity prices, making it unclear whether EPRA will actually implement what Parliament wants. But this isn’t the first time MPs have pushed for this kind of solution.
They previously directed EPRA to create a Street Lighting Infrastructural Support Levy by June of this year, though the regulator didn’t comply. Kenya Power is currently carrying at least KES 800 million in debt from street lighting projects.
The committee also wants Kenya Power removed from handling non-commercial projects entirely, recommending that rural electrification, the Last Mile connectivity project, and off-grid solar programs be transferred to the Rural Electrification and Renewable Energy Corporation instead.
Electricity prices have already been creeping up, partly because Kenya Power is using more expensive thermal power. A household consuming 200kWh paid KES 5,764 last month compared to KES 5,728 a year earlier.
If Parliament gets its way on rural electrification cost recovery, expect that gap to widen considerably by mid-2026.
