I am just wondering, If power being generated is less than what KPLC requires, it follows that there is already a market for the power at current prices. I believe current prices already provide an adequate return for shareholders. @VVS the ROE is low because KPLC converted prefs to equity and this prefs relate to a dud debt owed to Kengen at separation and is of now real value to shareholders really. Ignoring ROE, KPLC is already making enough profits so current prices are fair to consumers and shareholders.
I am certain beyond reasonable doubt that KPLC is raising tariffs to fund regeneration of the national grid. KETRACO will only do new high voltage transmission lines. As a consumer, I am horribly pissed off with this decision. It's the MOST stupid decision a government can make at this time and time will tell. We have barely repaired the economy and we want to play around with inflation again. CBK is barely able to control real interest rates and you know our businessmen you raise power everything goes up immediately, heck even your matatu owner is tempted to jump into price increase party.
I just think government should have found a cleverer way of funding this regeneration and spared consumers of tariff hikes. Expect inflation to continue rising and rates to remain higher and the economy to be remained in the woods!
As an investor, I don't mind consumers covering the debt service early but in the long term I worry because high power costs are destructive to the economy and may result in nominal growth at best, so long term for me this is sell but in the meantime a nice trading stock!