Consumers will enjoy lower electricity prices but pay more in tax measures after Members of Parliament awarded Kenya Power Sh9.9 billion tariff to cushion the company from implementation of taskforce’s reform.
President Uhuru Kenyatta in December made efforts to cut the price paid by consumers for electricity by 30 per cent in two phases.
The reduction in the cost of electricity will be implemented in two tranches of 15 per cent each where the first phase focused on cutting system losses incurred by utility firm Kenya Power annually while the second phase involves review of power purchase agreements (PAAs) the company has signed with dozens of independent power producers (IPPs).
“We have allocated Sh9.9 billion to cushion Kenya Power from the implementation of the taskforce’s reforms,” said the committee chairman Jeremiah Kioni said.
This was revealed in a sitting with Energy Principal Secretary Gordon Kihalangwa and acting Kenya Power managing director Rosemary Oduor where they were put to task to provide comprehensive report on how the company is set to utilize the allocation and submit it to the committee once Parliament gets back from its planned short recess.
The second phase of the 15 per cent is to be effective this month.
“The other 15 per cent will be reduced in the first quarter of 2022. I urge the power producers to demonstrate goodwill as we seek to make our energy sector a greater catalyst of our national development,” Uhuru said.
The Head of State had said that plans to reduce the cost of electricity through a rebate system were in the final stages.
Uhuru assured that government plans to do away with expensive Independent Power Producers are on course.
He said the Ministry of Energy had already started engagements with Independent Power Producers aimed at renegotiating the initial power purchase agreements.
“In realising the second tranche of the reduction in power bills, the Ministry of Energy has initiated engagements with Independent Power Producers aimed at renegotiation of power purchase agreements; so as to give better value for money to consumers,” he said.
The President kicked off plans to lower the cost of power in July, last year, where he promised manufacturers of 30 per cent reduction in cost of electricity.
Uhuru noted that the government has diversified the country’s energy mix with focus on renewables like wind and geothermal energy which have lower feed-in tariffs compared to thermal energy.