Kenya Power has received regulatory approvals to implement dollar billing for specific customer categories, aiming to mitigate currency exchange risks and stabilize revenue streams. The utility company, which reported a profit of Sh319 million in the first half of the financial year 2023/24, seeks to enhance financial resilience.
The approval followed extensive deliberations and assessments by regulatory bodies to ensure compliance and fairness in the implementation of the new billing system. Kenya Power Finance Manager Stephen Vikiru confirmed that the necessary approvals were obtained through engagement with regulators and the government.
The dollar billing plan primarily targets certain customer categories, including large commercial and industrial consumers. Customers earning in dollars will be affected, aligning the billing process with their currency and mitigating forex exposure for both parties.
The initiative not only increases the convenience of bill payments in a single currency but also supports Kenya Power in meeting its monthly financial obligations. The company needs approximately $46 million monthly to cover dollar-denominated loans and power purchase agreements, along with an estimated €18 million monthly.
In the recently announced half-year results, Kenya Power recorded a notable 31% growth in revenue from electricity sales, reaching Sh113.55 billion compared to Sh86.66 billion. The increase is attributed to factors such as a rise in the customer base, the termination of the 15% subsidy, and the introduction of higher tariffs in April 2023.
The company also observed positive trends in its energy portfolio, with a 240GWh increase in electricity units dispatched from renewable sources and a reduction of 93GWh from thermal sources. Additionally, a Sh2.05 billion reduction in the fuel cost charge in customer bills further contributed to the favorable financial results.
