The Ministry of Energy has put in place a comprehensive reform plan that will enable the energy sector to provide citizens with accessible and affordable electricity for domestic and industrial use.

The energy cabinet secretary Amb. Dr Monica Juma said the government, through the Department of Energy, is looking at ways to produce low-cost power and reduce tariffs for industries and domestic consumers while protecting the environment.

She said energy is an essential part of the government’s ‘big four’ agenda, a need that has prompted the government to focus on all the challenges facing the sector and in particular, strengthening Kenya Power. and Lighting Company (KPLC), to enable it provides efficient services.

The SC was accompanied by the Principal Secretary (PS) for Energy, Major General (Rtd), Dr Gordon Kihalangwa, speaking at a hotel in Nairobi, today, in a meeting with members of the Kenya Editors Guild, to enlighten them on the strategies the Ministry of Energy is undertaking to revive the sector.

She said that due to outcry from Kenyan consumers, businesses and individuals over the high cost of electricity supplied by KPLC which they compared to the cost in neighboring countries, the government has initiated the necessary reforms in the sector. of energy and KPLC.

“Our goal will be to achieve the 33% tariff reduction by December 23, 2021 and to review and renegotiate the terms of the Power Purchase Agreement (PPA),” Juma said.

The SC said the task force appointed by the president to review power purchase agreements (PPAs) to further reduce the cost of electricity to boost the growth of Kenyans and the prosperity of the country has completed its task and raised questions about the payment of tariffs to Independent Power. Producers (IPP), their procurement process and the nature of their contractual conditions and their mode of operation.

According to the task force report, IPPS accounted for 47% of electricity supply costs in FY2020, but only accounted for 25% of electricity volumes, while KenGen accounted for 48% of costs and 72% volumes.

“The report also showed that the rates paid to some PPIs were higher than those charged by KenGen for comparable factory technologies in the same locality,” said Dr Monica.

Regarding the findings, the SC announced that the government and the KPLC will discuss concerns with the respective PPIs in order to renegotiate and / or terminate PPAs that involve material violations, adding that a number of PPIs and stakeholders have already contacted the ministry and expressed interest in the discussions.

She added that the government is committed to meeting the challenges so that Kenyan consumers and businesses can have access to safe, affordable and reliable energy, while providing investors and lenders with a fair, equitable and sustainable return on their investment. .

“Negotiations and termination will be undertaken within the framework of the stipulations of the respective contracts, respecting contractual obligations and provisions within the limits of the law, but above all, responding to the national interest of this nation,” Juma stressed. .

Some of the working group’s recommendations include an immediate review of all current generation tariffs for different technologies compared to global tariffs, with the aim of decoupling transmission and distribution tariffs for transparency of electricity supply and ensure cost recovery in accordance with the principle of prudently incurred costs.

At the same time, she announced that the recommendations can only be realized when the organizational structure, procurement, systems and technical loss management, governance and financial restructuring reforms are undertaken at KPLC.

“KPLC will now have to be diligent in the production mix of the country, because the distribution of electricity will be advised by precise forecasts and the available capacity which will offer the lowest tariff”, underlined the CS.

The Principal Secretary of Energy said the ministry had already acquired 350,000 electricity meters to be installed across the country.

He said the ministry was working on the leaks and assured citizens that power outages will always be dealt with quickly, adding that delays in resolving power outages have resulted in lost revenue.

“All regional leaders have been instructed on what to do to make sure power outages are a thing of the past,” Dr Kihalangwa said.


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