Understanding the Core System

Many Kenyan households have expressed confusion and frustration when the number of electricity units received from Kenya Power and Lighting Company (KPLC) varies despite making a purchase of the same cash amount. An investigation by Streamline News confirms this is not an error, but a direct result of the country's regulated, multi-layered electricity tariff structure set by the Energy & Petroleum Regulatory Authority (EPRA).

The system is designed with tiered categories for domestic consumers, meaning the price per unit—or kilowatt-hour (kWh)—changes based on the total amount of electricity consumed within a calendar month. This structure is intended to make essential electricity use more affordable for low-consumption households.

The Domestic Tariff Tiers Explained

According to the latest tariff schedule approved by EPRA, domestic consumers are segmented into three primary bands based on their monthly consumption.

• Domestic Lifeline (0-30 kWh per month): Consumers in this band pay the lowest rate, set at approximately KSh 12.23 per unit before taxes and levies are applied. This tariff is designed to cushion low-income households.
• Domestic Ordinary 1 (31-100 kWh per month): Once a household's monthly consumption exceeds 30 units, they are moved to this higher tariff band. The rate for these units is approximately KSh 16.45 per kWh, exclusive of other charges.
• Domestic Ordinary 2 (Above 100 kWh per month): For consumption exceeding 100 units in a month, the rate increases further to approximately KSh 19.08 per kWh, before the inclusion of pass-through costs and taxes.

Kenya Power clarifies that a customer's tariff category is determined by their average consumption over three consecutive months, not just a single month's usage. This means that a temporary reduction in electricity use for one month might not immediately move a consumer to a lower, cheaper tariff band if their three-month average remains high.

The Impact of Monthly Variable Charges

Beyond the tiered consumption charges, several variable costs, often referred to as pass-through charges, significantly influence the final number of tokens a consumer receives. These charges are reviewed and gazetted by EPRA monthly and are passed directly from power producers to the consumer via KPLC.

As of the latest review for November 2025, EPRA announced several adjustments that increased the overall cost per unit. These key variables include:

• Fuel Energy Charge: This covers the cost of fuel (primarily diesel) used in thermal power generation. For November 2025, this was set at KSh 3.81 per kWh. This cost fluctuates based on global oil prices and the amount of thermal power added to the national grid.
• Foreign Exchange Fluctuation Adjustment (FERFA): This accounts for the impact of currency fluctuations on costs such as foreign-denominated loans and power purchase agreements with Independent Power Producers (IPPs). For November 2025, this was an additional KSh 0.9589 per kWh.
• Water Resource Management Authority (WRMA) Levy: A charge for energy purchased from hydropower plants, set at KSh 0.0129 per kWh in the latest review.

Statutory Levies and Taxes

On top of the base tariff and variable charges, all electricity purchases are subject to several statutory levies that are fixed as a percentage or a set rate:

• Value Added Tax (VAT): A standard rate of 16% is applied to the total cost of the electricity bill, including consumption charges and other levies.
• Rural Electrification Programme (REP) Levy: This is a 5% levy on the cost of units consumed and is used to fund the expansion of electricity access in rural areas.
• EPRA Levy: A charge of 3 cents per kWh to fund the operations of the energy regulator.
• Inflation Adjustment: This is reviewed semi-annually to account for inflation.

Consumer Strategy and Conclusion

The combination of the tiered tariff system and the monthly fluctuation of pass-through costs directly explains why a fixed amount of money, such as KSh 1,000, will not always yield the same number of electricity units. A purchase made when the Fuel Energy Charge is high will result in fewer units than when it is low. Similarly, a large purchase at the start of the month could push a low-consumption user into a more expensive tariff band for a portion of their units.

For low-to-medium electricity users, the most effective strategy to maximize units is to manage monthly consumption to remain within the 'Lifeline' tariff band (below 30 kWh) for as long as possible. This involves monitoring usage and making smaller, more frequent purchases that align with the monthly billing cycle, which resets at the beginning of each calendar month. For high-consumption households, the impact of this strategy is minimal as their usage will invariably place them in the higher, more expensive tariff bands.