The Ministry of Energy has defended its plan to reduce the cost of energy consumption from the Kenya Power to cushion Kenyans from high cost of living.
“Our focus will be to deliver on the reduction of tariff by 33 percent by 23rd of December 2021 and to review and renegotiate the terms of Power Purchase Agreement (PPA),” said Energy Cabinet Secretary Monica Juma.
She spoke while in a meeting with members of the Kenya Editors Guild, to enlighten them on the strategies the Ministry of Energy is undertaking to revamp the sector.
According to CS Monica, the reforms will also reduce tariffs for industries and domestic consumers while protecting the environment.
The CS accompanied by Principal Secretary for Energy Gordon Kihalangwa, said the government has commenced the necessary reforms to the energy sector and the Kenya Power and Lighting Company (KPLC).
This follows public outcry from power consumers, businesses and individual Kenyans regarding the high cost of power supplied by Kenya Power compared to the cost in the neighboring countries.
She revealed the Taskforce appointed by the President to Review Power Purchase Agreements to pursue the reduction in the cost of power completed its task.
CS Juma also raised an alarm over the payment of tariffs to Independent Power Producers , their procurement process and the nature of their contractual terms and their style of operation.
The Ministry of Energy announced that the government and KPLC will discuss with respective IPPs on the concerns seeking to renegotiate or terminate PPAs found to have material breaches, noting that a number of IPPs and stakeholders have already approached the Ministry and expressed interest for discussions.
At the same time she stated that recommendations can only be achieved when organizational structure, procurement, management of systems and technical losses, governance and financial restructuring reforms are undertaken at KPLC.
According to the Taskforce Report IPPS accounted for 47 percent of power procurements cost in Financial Year 2020, but only accounted for 25 percent of power volumes, whilst KenGen accounted for 48 percent of costs and 72 percent of volumes.
“The Report also showed that tariffs paid to certain IPPs were higher than what is charged by KenGen for comparable plant technologies in the same locality,” stated Dr. Monica.
This comes after President Uhuru Kenyatta directed the Ministry to ensure the full implementation of the Report of the Presidential Taskforce on Review of Power Purchase Agreements that establishes a pathway for the reduction of electricity prices by 30 percent latest December 24, 2021.
“I therefore look forward to Kenyans being relieved of the burden of high tariffs by Christmas Day,” President Kenyatta said.
The Principal Secretary for Energy said the Ministry has already acquired 350,000 electricity meters for installation across the country.
