distribution utilities
Image credit: Stock

The introduction of discounted tariffs for businesses operating at night is by far benefiting about 1,000 manufacturers and large businesses in Kenya.

The Energy Regulatory Commission (ERC) announced that the scheme will be extended to all businesses operating at night from 10:00pm to 6:00am, an off-peak window during which electricity consumption is low.

“We plan to remove the consumption capping or minimum consumption and make it that any consumption at off-peak enjoys the discounted tariff,” ERC director-general Pavel Oimeke said.

According to the Daily Nation, Oimeke said the electricity distributor, Kenya Power, is procuring smart meters for small- and medium-sized enterprises (SMEs), like those installed at the premises of large power users (above 15,000 units per month).

The smart meters are expected to sense and adjust customers’ billing for both off-peak and on-peak power consumption. Read more: Kenya highlights path to scaling private power grids

Tariffs under review

The off-peak tariffs review is part of the proposals that the energy regulator seeks to implement in coming months.

Currently, only large businesses and factories enjoy the 50% discounted night rate due to the strict eligibility criteria that firms have to meet to enjoy the reduced tariffs.

Manufacturers, which operate at 100% capacity daily, and have no room to increase operations and grow their power intake are reported to be enjoying only a 5% discount.

However, the ERC intends to relax these conditions to make the discount available regardless of a firm’s consumption levels.

Currently, firms have to exceed their normal power consumption in order to be eligible for the discount scheme.

The 50% discount will also be revised downwards to a yet to be determined rate.

“We are working on a level of energy charge discount that leaves Kenya Power revenue neutral. It will definitely not be at 50% energy charge,” said Oimeke.