Even the most strident critic of President Kenyatta’s administration will concede that the reforms and the disruption and shake-up of the electricity sector that he has been implementing even as he prepares to leave office in a few months has made a great deal of progress.
It started with the appointment of the task force on negotiation of power purchase agreements led by investment banker and corporate executive John Ngumi. Then followed the appointment of a reform-committed board at Kenya Power and the removal from office of a long serving insider and CEO.
Lastly, there was a shake-up at the Ministry of Energy whose highlight was the exit from Nyayo House of long-serving Cabinet Secretary Charles Keter and his principal secretary, Mr Joseph Njoroge.
I’m waiting to see whether the second instalment of the 30 per cent reduction in electricity tariffs, which President Kenyatta promised consumers several months ago, will happen. It would be, by far, the biggest dividend from the shake-up of a malfunctioning electricity sector that has, for many years, consigned the consumer to a regime of ever-increasing power prices.
For me, the significant thing about the shake-up is the signal that policy is shifting to focusing on affordable electricity for the people. Indeed, the main reason electricity prices are high is that we have been in a regime where policy has elevated promotion of private investment in the sector above delivery of affordable power to the ordinary man and woman in this country.
I’m surprised that none of the presidential candidates has picked up the issue of affordable power to the people as a clarion call and overarching campaign issue. Widely affordable electricity must be made a top agenda item of the election.
Whenever the discussion about where the focus of policy on electricity should be, I always find myself going back to the quotes of one of America’s most prolific inventors of all time, one Thomas Edison, who acquired a record number of 1,093 patents and was the driving force behind such innovations as the incandescent light bulb, the phonograph and some of the earliest motion picture cameras.
Edison was once quoted as saying that his ambition as an inventor was to make electricity so cheap that only the very rich could afford to burn candles. He wanted to make candles a luxury for the rich.
I also read somewhere that, when Lenin was at one time asked to describe the concept ‘development’, he famously answered: “Socialism plus cheap electricity.” In the 1920s, the pioneering Finnish electrical engineer Bernard Wuolle concluded that the degree of electrification measures indicates a nation’s level of civilisation.
I want to see the presidential candidates make commitments to bring electricity prices down. The presidential task force has provided the formula and the evidence and analysis showing that all it will take is high-level political commitment to dismantle the corrupt networks and greedy elites who feed on rent-seeking opportunities from dealings with independent power producers (IPPs).
Truth be told, the focus of policy on electricity has been to make the electricity merchants called IPPs and their private sector allies wealthy.
Here is a typical example of how policymakers at the Ministry of Energy have been making those merchants wealthy at the expense of the consumer. On April, 19, 2016, the government—completely out of the blue — published a gazette notice that offered huge benefits and concessions to IPPs at the expense of Kenya Power.
First, it lowered the minimum heavy fuel stock levels that IPP plants could hold. Secondly, it allowed the plants to operate outside the merit order. The gazette notice benefited the merchants in three ways:
The first was by reducing the minimum fuel stockholdings for the plants. In that case, it released for them billions of shillings in working capital. According to the analysis by the presidential task force report, the working capital released for IPPs following the gazette order was worth $3-7 million, depending on the size of the plant.
Secondly, it gave IPPs the opportunity to run the equipment for longer than the availability thresholds stipulated in the agreements with Kenya Power. They could run the machines even when there was no demand for the power, continuing to load the cost of generation to the consumer.
The government must explain to us why Kenya Power was allowed to make such big concessions to these mercantile power plants at the expense of the electricity consumer. And this was a big scandal because the infamous gazette notice remained in force for years. The presidential candidates must commit to dismantling corruption networks in the electricity sector and also giving affordable power to the people.
