Explainer: 7 Taxes and Levies on Your Electricity Bill

Picture this: you are about to purchase your monthly Ksh500 worth of electricity units when Kenya Power informs you that you have received Ksh305 worth of units instead.
The other Ksh195 has been chalked up to ‘other charges’, and you receive about 25 units for your Ksh500.
What has just happened is that Kenya Power has applied a total of seven taxes, levies and other charges, whose amount often changes monthly.
So, what are these charges?From a constant Value Added Tax (VAT)to the ever-changing forex adjustment and fuel cost charge, these taxes are applied to any electricity purchase made by both pre-pay and post-pay customers.
To understand how this works, it is important to note thatnot everyone pays the same pricefor a single unit (1000 kWh) of electricity.
Those who use the least amount of electricity, under 30 units monthly, are charged the least at about Ksh12.23 per unit, while those who use over 100 units per month are charged Ksh19.2 per unit. In the middle are those using between 31 and 100 units per month, and they pay Ksh16.45 per unit.
This amount is calculated by averaging the units used in the past three months and may change with increased or reduced electricity usage.
After capturing this, the levies and taxes will be applied as follows:
The Kenya Revenue Authority is the recipient of this 16 per cent statutory tax. It remains constant unless changed in government policies.
FCC is a variable charge, which means that the amount added might change from month to month.
It arises from the variations in the quantity of fuel consumed during electricity generation in the previous month.
In September 2025, all meterreadings will be liable for an extra360 Kenyancents per kWh to facilitate this charge.
FERFA is also a variable charge per unit, which includes the sum of the foreign currency cost incurred by KenGen and the Kenya Power and Lighting Company, other than costs relating to electric power producers.
For instance, the September 2025 electricity bill will cost an extra80.67 cents per unit to be remitted for this charge.
This is a levy passed on to the Energy and Petroleum Regulatory Authority (EPRA), the regulatory authority governing Kenya Power.
It is constant and is currently charged at 3 cents per unit.
WARMA is a levy which is determined by the amount of energy supplied from hydroelectric facilities in the previous month.
The amount charged also changes from month to month.
In September 2025, an adjustment of1.34 cents per kWh will be made.
This amounts to five per cent of the costs of the units consumed by the customer.
As the name suggests, it is used in the implementation of rural electrification projects.
Additionally, the cost of electricity supply is impacted by the inflation adjustment charge, which fluctuates according to both domestic and international inflation rates.
It is adjusted every six months from January 1.