Cautious optimism as Houses probe expensive electricity

By Silas Apollo

Kenyans may soon have the option of buying affordable electricity if joint investigations launched by the two Houses of Parliament on the runway cost of electricity in the country bear much fruit.

Both the Senate and the National Assembly have launched independent investigations into the high cost of power, blamed for causing pain to most families and businesses nationwide.

The cost of electricity has been high for a better part of this year, especially after the Energy and Petroleum Regulatory Authority approved new tariffs on power.

The tariffs, proposed by the Kenya Power and Lighting Company, increased electricity prices by close to 63% in April, as KPLC moved to upgrade its ageing distribution systems using the additional revenues raised from the price adjustments.

Under the new tariff, Kenyans consuming below 30 kilowatts(kWh) monthly had their electricity bills go up by 22.2%.

Small businesses consuming less than 30 monthly units are now paying Sh12.22, up from Sh10 per unit.

The domestic ordinary one category, with consumers between 31-100 kWh per month, had their costs go up by 63% from Sh10 per unit to Sh16.3.

And according to the National Assembly’s energy committee and that of the Senate, the inquiries aim to identify the cause of the high prices, especially the contracts signed between Kenya Power and the Independent Power Producers in the country.

The inquiries also follow the increase in the cost of power by the IPPs by 19 to 25%.

Equally, the National Assembly’s Committee of Energy has argued that it also wants to understand why some IPPs have recently opted out of thermal generation and instead increased their wholesale prices by wider margins.

“We won’t allow the Energy and Petroleum Regulatory Agency to make baseless adjustments on pricing structure that affect Kenyans in the name of some complicated formula that I have seen in this document,” said the committee chairman Vincent Musyoka.

According to documents tabled before the committee, some of the firms said to have increased their prices include Lake Turkana Wind Power Ltd (LTWP), the biggest IPP with a 300MW capacity that has so far raised the cost to Sh13.1 per unit from Sh10.5 per unit as at July 2022 excluding the forex adjustments that IPPs charge.

Others are Orpower4 which now sells power at Sh14.7 per unit of energy generated, Muhoroni GT at Sh58.8, Gulf Power at Sh25.5, and Triumph at Sh28.4, among others.

The investigations also come in the wake of revelations that Kenya Power was also paying some firms in dollars instead of the Kenya shillings, a situation that some critics and legislators have blamed for the increasing power costs in the country.

The increased power prices have also, in effect, been blamed on growing inflation in the country – which according to government statistics, has further worsened the situation for most families and businesses across the country.

Early this year, Energy cabinet secretary Davis Chirchir said that the government was determined to cut down the high cost of power to tame inflation which hit the 8% mark in May.

Chirchir said power cost has become a crucial driver of inflation, and efforts to reduce the current costs are crucial in easing household burden.

“Ensuring affordable power to consumers will see the demand prop up, driving up the need for more investment in power production, which would translate to constant, affordable prices in future,” Chirchir told journalists in June.

At the Senate, the focus is also on some agreements signed between Kenya Power and IPPs.

For the last two weeks, the Senate Standing Committee on Energy has been on a relentless quest to unearth the cause of the high electricity costs in the country.

Committee chairman Wahome Wamatinga has argued that the inquiry has not only opened the committee’s eyes to many things regarding this matter but also demystified a lot of myths surrounding it.

“While many people have a misconception on who Independent Power Producers are and have labelled them all sorts of names, I have come to view them as necessary and important partners in reducing the cost of electricity,” said Senator Wamatinga.

The committee heard that during the Africa Energy Forum, the committee got to understand that South Africa, for example, from inception to financial close, takes four months before construction of a power plant begins.

“We should benchmark with those that have done it correctly. This is why as a Committee, we thought we should have this meeting. We need to talk and keep talking,” said Edwin Sifuna, a member of the Energy Committee.