In Summary
  • The ERC had in January said it would create a new tariff from next month that will have uniform charges for domestic customers, eliminating a subsidy that has for long helped to keep power bills for small consumers low. 
  • The ERC said the current model is unsustainable and amounts to punishing large domestic consumers, which runs the risk of discouraging more use of the utility.

The Energy Regulatory Commission (ERC) has made a U-turn in its plan to abolish electricity subsidies for low-income households, meaning bottom power users will continue paying lower tariffs.

The ERC had in January said it would create a new tariff from next month that will have uniform charges for domestic customers, eliminating a subsidy that has for long helped to keep power bills for small consumers low. 

Low power consumers — using 50 units and below per month — enjoy subsidised rates under ‘lifeline tariff,’ which is a government policy tool to cushion the poor from high costs.

“Lifeline tariff for bottom-end consumers will remain,” ERC director-general Pavel Oimeke said on Friday.

Kenya’s tariff set up is where the rich pay steeply for poor homes to enjoy the subsidy.

In January, the ERC said the current model is unsustainable and amounts to punishing large domestic consumers, which runs the risk of discouraging more use of the utility.

Asked why the change of plan to retain the subsidy, Mr Oimeke said: “It’s common practice to support the economically disadvantaged amongst us in the electricity subsector.”

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