Consumers to buy electricity directly from KenGen as Senators plot to kill Kenya Power monopoly for overcharging Kenyans
3 min readKenGen to sell electricity directly to consumers as Senator plans to rein in high costs by doing away with Kenya Power’s monopoly.
Senators now advocate for allowing KenGen to sell electricity directly to customers in order to break the Kenya Power monopoly and reduce the exorbitant cost of energy.
Additionally, they demand an investigation of contracts given to independent power producers (IPPs), calling them punitive.
According to Wahome Wamatinga, chair of the Senate Energy Committee, KenGen provided 8,443-gigawatt hours of electricity in the fiscal year that ended in June 2021, accounting for 70% of the entire power supply, for which it was compensated with Sh44.8 billion.
IPPs, however, only provided 3,000-gigawatt hours—less than 30% of the total power—but they were paid more than Sh56 billion.
According to the Nyeri senator, KenGen would have cost Sh64 billion to meet all of Kenya’s electricity needs, saving the nation Sh34 billion.
He clarified that the discrepancy results from KenGen’s Sh5.41 per unit price and IPPs’ Sh9 to Sh173 per unit prices, which are paid in US dollars rather than Kenyan shillings.
Kenya Power must also pay for what is generated by IPPs regardless of whether it is consumed or not.
“As a committee, we note that the cost of electricity charged by the IPPs is 30 times compared to what KenGen charges,” said Mr. Wamatinga.
He said this means that for Sh1,000, one can get only 40 units of electricity and Sh100 gets an individual four tokens though energy is a critical factor of production.
“If we want to industrialize and attract international manufacturing firms, then the cost of manufacturing has to be lowered by bringing down the high cost of electricity,” he said.
Although Kenya Power operates as a monopoly and should be making huge profits, he argued, it is dogged by governance and accountability issues, with audited accounts as of June 2021 revealing a liability of Sh116 trillion against assets of Sh49 trillion.
Kenya struck expensive deals with IPPs that have made the cost of electricity in Kenya exorbitant, lamented Nairobi Senator Edwin Sifuna, calling for a total overhaul of the energy sector.
Interestingly, the contracts have an average length of 23 to 27 years, with a majority expiring in 2030, while some will last until 2043.
“We must push for a reduction of power charges [that are] finishing Kenyans. In Mukuru, for instance, residents have to rely on informal connections to survive. This is because Sh100 can only [buy] three tokens,” Mr. Sifuna said.
Tana River Senator Danson Mungatana called for individuals who signed the punitive contracts with IPPs to be prosecuted.
Nandi Senator Samson Cherargei added that Director of Public Prosecutions Noordin Haji should ensure that prosecutions are concluded against individuals who oversaw the purchase of faulty transformers that he blamed for constant power blackouts.
In Nandi alone, he said, there are 800 faulty transformers, and 10,000 are lying idle at Kenya Power’s Roysambu yard in Nairobi.
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