The Energy and Petroleum Regulatory Authority (EPRA) has offered insights into why electricity prices will remain elevated until December 2024.

EPRA's explanation revolves around the need to recoup an eight-month backlog of unpaid subsidies accumulated between October 2019 and March 2023.

In response to a presidential directive in 2022, EPRA instated a 15% tariff reduction for consumers, effective from January 2022 to April 2023. To sustain this reduction, EPRA required a revenue infusion of Ksh26.3 billion. Sector entities pledged KSh12.2 billion, with the balance to be covered by a subsidy from The National Treasury.

However, despite Treasury meeting its commitment until August 2022, pass-through costs remained stagnant from January 2022. Consequently, the unpaid subsidy portion had to be transferred to consumers.

EPRA found itself compelled to reassess tariffs for the periods of 2023/2024, 2024/2025, and 2025/2026 in April 2023, now incorporating the outstanding unfunded costs. Notably, the tariff recalibration was meticulously executed to avoid overbilling, considering existing contracts for generation, operation, maintenance, and associated financing costs.

On February 14, the Energy CS announced a hike in the fuel levy from 0.25 to 0.75, slated for immediate implementation, sparking concerns over potential tripled electricity costs for Kenyans.

EPRA underscores that even with the approval of new tariffs, clearing the outstanding subsidy remains imperative, continuing through the pass-through mechanism until December 2024.