Now government reaffirms Kenya Power’s monopoly

Wednesday December 12 2018

Kenya Power technician

Kenya Power technician at work. Kenyans were banking on the Energy Bill 2018 that has provisions for licensing of other companies to end the monopoly of Kenya Power. PHOTO | NMG 

By NJIRAINI MUCHIRA
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The Kenyan government has ruled out plans to license new entrants in the electricity distribution and retail market, in the process securing the monopoly of troubled Kenya Power.

This comes in the wake of a backlash from consumers over inflated bills, poor customer service and incessant outages.

Kenyans were banking on the Energy Bill 2018 that has provisions for licensing of other companies to end the monopoly of Kenya Power, a company that has sunk to new lows after it was accused of cooking its books ahead of the 2017 general election.

Auditor-General Edward Ouko in his latest report accuses the company of misrepresenting its financial position, ostensibly to keep power costs artificially low.

The company did not restate its financial results in June 2017 and June 2018 as instructed. Then it declared a massive 63.7 per cent drop in net profits.

The Energy Bill, 2018 states, “A retail licence authorises 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.”

Power producer Kenya Electricity Generating Company (KenGen) is among companies that have been angling to enter the retail market by selling electricity directly to large consumers

Already, the company has completed a feasibility study to set up an industrial park at its geothermal power generation hub at Olkaria.

“The industrial park will provide new revenue sources for KenGen through direct sale of electricity, steam and brine,” the firm said in its 2018 financial statement.

The plan, however, seems to have fallen through after Energy Principal Secretary Joseph Njoroge said the government has no intention of licensing other companies to offer distribution and retail services as a matter of policy.

“We have no intentions of making any sector player insolvent. It is important that all players continue to be financially healthy,” he said.

He added that although the Energy Bill, which is in the final stages of debate in parliament, provides for licensing of other companies, it will not have any impact on distribution of electricity, because the government has no intention of ending Kenya Power’s monopoly.

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