His Excellency President Uhuru Kenyatta has welcomed recommendations of a taskforce formed to establish a path towards the reduction of the cost of electricity by over 33 per cent within four months.
In affirmation of this seminal and progressive solution to a decadelong problem, the President has directed the Energy Cabinet Secretary, Charles Keter, to immediately secure the implementation of the recommendation of the Presidential Taskforce on Review of Power Purchase.
“The consequence of the proposed interventions is that a consumer who previously spent Sh500 per month on electricity shall by 31st December, 2021 pay Sh.330 per month. This cost reduction will be achieved through the reduction of the consumer tariffs from an average of Sh24 per kilowatt hour to Sh16 per kilowatt hour which is about two thirds of the current tariff,” read a statement from the State House.
Other recommendations by the taskforce include review and renegotiations with Independent Power Producers (IPPs) to secure immediate reduction in Power Purchase Agreements (PPA) tariffs within existing contractual arrangements.
Secondly, the cancellation with immediate effect of all unconcluded negotiations of Power Purchase Agreements and ensure future PPAs are aligned to the Least Cost Power Development Plan (LCPDP).
Additionally, the taskforce also recommended fast-track and deepen the ongoing reforms at KPLC to restructure it into a commercial entity that is both profitable and also capable of delivering efficient and cost-effective electricity supply to all consumers.
“Kenya Power to take the lead in formulation and related PPA procurement of the Least Cost Power Development Plan (LCPDP). KPLC to institute Due Diligence and Contract Management frameworks for PPA procurement and monitoring along the lines of the drafts provided by the Taskforce and to also institute one and five-year rolling demand and generation forecasts and associated models,” the task force recommended.
Kenya Power has also been recommended to adopt standard PPAs and proposed Government Letters of Support (LOS) along the lines of the drafts provided by the taskforce.
Moreover, the power company is to undertake a forensic audit on the procurement and system losses arising from the use of Heavy Fuel Oils (HFOs) and in line with the constitutional imperative for transparency in the public sector, KPLC’s annual reports should include the names and beneficial ownerships of all IPPs with which it has contractual arrangements.
The President thanked the taskforce for their sense of civic duty and professionalism and for expeditiously discharging their mandate.
He also conveyed his gratitude to the new Board of Kenya Power for steering the ongoing ground-breaking reforms in the nation’s anchor utility company.
