Consumer electricity bills to reduce 33pc on President Uhuru orders

Consumers should expected at least 33% reduction in their electricity power bills within the next four months following a directive issued by President Uhuru Kenyatta.

The President while acting on recommendations by Presidential Taskforce on Review of Power Purchase Agreements set up in March to address the high cost of electricity for both individual consumers and enterprises, gave the Ministry of Energy four months to act on the report.

Under the directive, consumers will pay not more than Kshs. 16 per kilowatt hour for electricity from the current Kshs. 24 per kilowatt hour.

The consequence of the proposed interventions is that a consumer who previously spent Kshs. 500 per month on electricity shall by 31st December, 2021 pay Kshs. 330 per month,” a read a statement from State House Nairobi.

The nine points recommendations by the Taskforce will now be implemented by the new Energy Cabinet Secretary Amb. Monica Juma who has been reassigned from the Ministry of Defence, replacing Charles Keter who is now the Cabinet Secretary for Devolution.

CS Juma in now expected to review and renegotiate for immediate reduction of PPA tariffs between Kenya Power and Independent Power Producers within existing contractual arrangements.

There has been uproar over high charges Kenya Power pays for power supplied by IPPs when compared to those charged by KenGen, a factor that has been attributed to financial distress facing the utility power distributor as well as high power bills.

The president also directed for immediate cancellation of all pending negotiations between the power utility firm and IPPs and ensure PPAs are aligned to the Least Cost Power Development Plan.

According to the Energy and Petroleum Regulatory Authority updated Least Cost Power Development Plan 2017-2037, Kenya had 13 IPPs with installed capacity of 696 megawatts as of June 2017, with KPLC as the off-taker.

The President also directed that ongoing reforms at KPLC be expanded and fast-tracked in order to restructure the firm into a commercial entity that is both profitable and also capable of delivering efficient and cost-effective electricity supply to all consumers.

The 16-member Taskforce led by John Ngumi also recommended that Kenya Power take the lead in formulation and related PPA procurement of the Least Cost Power Development Plan (LCPDP), institute Due Diligence and Contract Management frameworks for PPA procurement, institute one and five-year rolling demand and generation forecasts and associated models as well as adopt standard PPAs and proposed Government Letters of Support (LOS) along the lines of the drafts provided by the Taskforce.

By December 31, 2021, KPLC under the guidance of the Energy CS will have undertaken a forensic audit on the procurement and system losses arising from the use of Heavy Fuel Oils (HFOs) and ensure annual reports should include the names and beneficial ownerships of all IPPs with which it has contractual arrangements in order to create transparency.

  

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