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MPs plot scrapping of Kenya Power monopoly

MPs say the plan will address the high cost of electricity and promote competition in the energy sector

Kenya Power employees at work

The proposal to end Kenya Power's monopoly and allow Independent Power Producers (IPPs) to sell tokens directly to consumers is gaining momentum.

The National Assembly's Energy Committee is currently in Mombasa writing a report on how to reduce the high cost of electricity in the country.

“The main purpose of this proposal is to give consumers choices on where to buy their tokens from and IPPs to have direct contact with the customers. It is the IPPs that will decide the billing. If a customer feels KPLC is expensive, they can opt for IPPs,” a source disclosed to Business Daily.

This move aims to establish a direct connection between IPPs and customers, offering competitive pricing.

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If approved, consumers will be able to choose between buying their power from either Kenya Power or IPPs by choosing which is cheaper.

The committee is also considering the termination of expensive contracts between Kenya Power and the IPPs that costs the firm Sh23 billion annually.

The Energy and Petroleum Regulatory Authority (EPRA) has also developed regulations to facilitate direct power sales, including a licensing and tariff-setting framework specifically for IPPs.

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Earlier in June, IPPs pushed for a proposal to sell electricity directly to consumers, potentially breaking Kenya Power's long-held monopoly.

During a session with the Senate Committee on Energy, George Aluru, Chairman of the Electricity Sector Association of Kenya, proposed opening the Kenya Power market to competition from local independent power producers, citing the Energy Act, 2019, which supports competition.

IPPs argued that the existing system, where they sell power to Kenya Power at wholesale prices and subsequently repurchase it at retail prices, leads to inefficiencies and restricts their ability to innovate and offer better deals directly to end consumers.

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