Senators plot to kill Kenya Power monopoly

Senators now want KenGen to be allowed to sell electricity directly to consumers so as to rein in the high cost of lighting by doing away with the Kenya Power monopoly.

They also want an audit of contracts awarded to independent power producers (IPPs), describing them as punitive.

KenGen supplied 8,443 gigawatts hours of electricity in the financial year ending June 2021, making up 70 percent of the total power supply, and was paid Sh44.8 billion, said Senate Energy Committee chairperson Wahome Wamatinga.

But IPPs supplied 3,000 gigawatts hours, less than 30 percent of total power, but were paid over Sh56 billion.

If KenGen were to supply 100 percent of power consumed by Kenyans, the amount paid would have been Sh64 billion, saving the country Sh34 billion, the Nyeri senator said.

He explained that the disparity comes about because KenGen charges Sh5.41 per unit while IPPs charge between Sh9 and Sh173 per unit and are paid in US dollars and not Kenya 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 industrialise 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.