Consumers to purchase electricity directly from producers as parliament moves to break Kenya Power monopoly
3 min read
Parliament discloses a plot to end Kenya Power monopoly to give consumers the choice to buy electricity from producers
Parliament discloses a plot to end Kenya Power monopoly to give consumers the choice to buy electricity from producers.
If MPs approve a recommendation in a report from a parliamentary committee, Kenyan consumers will have the option to purchase electricity tokens directly from independent power producers (IPPs) or Kenya Power.
The National Assembly’s Energy Committee is recommending that IPPs generating electricity from geothermal energy with the support of KenGen sell power directly to consumers as one of the strategies to lower the high cost of electricity as part of in the latest push to end the Kenya Power monopoly.
The proposal is contained in a draft report of the committee that is currently in Mombasa writing its report on how to reduce the high cost of electricity.
Sources in the committee said MPs want consumers to choose between buying their power from either Kenya Power or IPPs by choosing which is cheaper.
The proposal, if approved by parliament will be a departure from the current arrangement where IPPs have to sell to Kenya Power to distribute to end consumers.
“The main purpose of this proposal is to give consumers choices on where to buy their tokens from and IPPs to have direct contact with the customers. It is the IPPs that will decide the billing. If a customer feels KPLC is expensive, they can opt for IPPs,” said the source.
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According to committee sources, even though Kenya Power rejected the plan because of the contracts it currently had with IPPs, MPs vowed they would do whatever it took to provide consumers a choice and drive down the price of electricity.
The MPs also want to terminate the contracts with five IPPs, who are now receiving a total of Sh23 billion annually in phases.
“The Sh23 billion we are paying annually means it’s close to Sh1 billion monthly, this is not just sustainable. Those will just have to go,” said the source.
According to the draft report, the contracts will be ended 36 months after the government has put in place enough infrastructure to ensure that there is no vacuum left with the departure of the five IPPs.
While some MPs wanted the contracts to expire after 24 months, the technical team advising the committee reportedly opposed it, arguing that the timeframe is too short for the government to put infrastructure in place to fill the void left.
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