This is part one of a two part series to show you exactly what is in your electricity bill. Part two tomorrow.

The latest survey by Consumer Unity and Trust Society dubbed: The State of the Kenyan Consumer, revealed that electricity cost tops consumers’ list of worries. Below is an analytical look at the different components of your electricity bill, and what each component covers.

Your electricity bill is divided into two components:

• Kenya Power Charges
• Government Taxes and Third Party Levies

Kenya Power Charges

These charges basically cover Kenya Power expenses plus it is from it that Kenya Power is able to generate profits.

On your electricity bill, Kenya power charges are covered by the Fixed Charge and Consumption Charge.

The Fixed Charge currently stands at KES 120 on every electricity bill and it caters for all Kenya Power fixed costs such as meter reading, billing, printing, postage of bills and customer care.

Kenya Power had in May 2012 sought for a 25 per cent adjustment in power tariffs, which would have seen electricity bills increase. Part of this 25 per cent adjustment was an increase in the fixed charge to KES 160 from KES 120. This tariff adjustment remains is still pending Energy Regulatory Commission (ERC) confirmation.

The Consumption Charge is basically generated from your electricity consumption within a billing period. The more electricity units you consume, the higher your consumption charge will be.

As it currently stands, electricity units cost as follows:

• Each unit from 0 to 50 units costs KES 2.00 per unit
• Additional units from 50 to 1,500 units cost KES 8.10 per unit.
• Consumption above 1,500 units cost KES 18.75 per unit.

As per the 25 per tariff adjustment, mentioned above, consumption charges will also increase since the cost of electricity units will be adjusted as follows:

• 0 to 50 units will cost KES 3.70 per unit, up from KES 2.00 per unit.
• Additional units from 50 units to 1,500 units will cost KES 11.79 per unit, up from KES 8.10 per unit.
• Consumption above 1,500 units will cost KES 22 per units, from KES 18.75 per unit.

70 to 75 per cent of funds from Consumption Charge is used to purchase bulk power from electricity generating companies such as KENGEN. 25 to 30 per cent of the balance is used to in Kenya Power operations and it’s from this balance that Kenya Power makes a profit.

Back to the 25 per cent tariff adjustment, the Energy Regulatory Commission (ERC) Retail Tariff Review policy requires that Kenya Power applys for review of tariffs after every three years. The previous tariff review was in 2008 and the next was expected to be in June 2011, which now happens to be the 25 per cent tariff adjustment. The government suspended this application, at the time, to cushion Kenyans that were suffering from expensive food and energy.

Treasury has since given its go ahead, pending ERC's confirmation of the proposed tariff.

If this tariff plan is passed, Kenya Power will be able to generate revenue to purchase additional bulk power and meet operational cost of its expanding distribution network and customer services. this will this will though translate in higher electricity bills you the consumer.

The 25 per cent tariff review has a direct impact on the Kenya Power Charges component of your electricity bill.

We will analyse government taxes and third party levies included in your electricity bill tomorrow.