KenGen, a producer of up to three-quarters of the country’s power has been denied permission to sell power directly to bulk consumers. “We want KenGen to focus on generation and Kenya Power to stick to distribution,”said Energy Regulatory Commission Director General, Pavel Oimeke at a Press briefing.
The news comes as a major disappointment to Kenyan manufacturers who, in their recently released advocacy report, the Manufacturing Priority Agenda 2018, had been calling for generators of electricity like KenGen to be allowed to sell bulk electricity to consumers to enhance the quality and reliability of electricity.
The Kenya Association of Manufacturers, through the above mentioned report, had expressed concerns about the quality of electricity supplied to high voltage and bulk consumers, as power fluctuations and outages lowered the productivity of their machines.
Any form of competition to Kenya Power-Kenya’s sole electricity distributor, would have been a welcome development for manufacturers, however, things have turned out different.
“We don’t want a scenario where one single player would be doing everything – generating and at the same time selling to end users as this could present a conflict of interest and hurt a segment of consumers.”
Not all is lost though, the proposed Energy Bill 2017 awaiting parliamentary approval provides for a different scenario with the introduction of a power retail license.
“A retail license authorizes a person to supply electricity to consumers through a series of commercial activities including procuring the energy from other licensees, inspection of premises, metering, selling, billing and collecting revenue,” states the Bill.
This is not the first time the bill has been tabled in parliament; in 2016, the president returned it to parliament for amendment. In a statement the same year, Energy Ministry Permanent Secretary Eng. Joseph Njoroge gave insight into the government’s concerns about the Bill.
‘The ministry reckons that market liberalization would see Kenya Power default on its contractual obligation of buying specified amounts of power from producers since the entry of other players (electricity distributors) would eat into its retail market share,” said Eng. Njoroge.
Both consumers, power producers and Kenya power, have genuine concerns for or against opening up power distribution to competition, however, debate is sure to rage on about which decision would have the greatest benefit.