• Saturday, 22 June 2024
Kenya's power monopoly is coming to an end as the ministry divides the supply role.

Kenya's power monopoly is coming to an end as the ministry divides the supply role.

As part of the Ministry of Energy's proposed reforms to boost efficiency and cut costs, Kenya Power is planning a major split in its business that will see it only distribute electricity to large commercial and industrial consumers.

According to a White Paper published by the ministry, the Rural Electrification and Renewable Energy Corporation (Rerec) will take over the role of distributing electricity to household consumers, relieving Kenya Power (KPLC) of the pressure of serving industrialists who account for more than half of its sales and millions of household customers who account for roughly one-third of dispatched power.

"Reconfigure KPLC and Rerec across consumer segments so that KPLC is positioned to serve large commercial and industrial consumers, while Rerec is positioned to serve the social mandate for household consumers," Energy Principal Secretary Gordon Kihalangwa recommends in a paper published today.

Except for geothermal, Rerec is currently mandated to implement rural electrification projects and to spearhead the adoption of green energy.

Dr. Kihalangwa stated that the proposal is open to public comment. "We are seeking stakeholder input on this matter, after which we will develop a work plan and implementation timelines." "It's a work in progress," he explained.

The paper suggests that KPLC staff be seconded to Rerec to assist with the transition, as well as an audit of KPLC distribution assets to smooth the transition.

According to the most recent Energy and Petroleum Regulatory Authority (Epra) data, KPLC added 317,296 customers in the six months to December as the economy recovered from Covid-19 disruptions.

If implemented, this would be the second major reorganization of KPLC operations in less than a year, following Epra's removal from a key role in determining the amount and type of electricity dispatched to the national grid in December 2021. Kenya Power's revenue base and cost structure will be affected by the changes. Households will be hoping that Rerec will improve the reliability of Kenya Power's supply, which has been hampered by the company's aging infrastructure.

The Kenya Electricity Transmission Company (Ketraco) took over the operations of the National Energy Control Centre (NCC), which manages the uptake of energy from various sources for distribution on the national grid, as part of the 2021 changes to reduce conflict of interest and close loopholes used by some cartels to force costly power on consumers.

In March 2020, President Uhuru Kenyatta appointed a task force to review Power Purchase Agreements (PPAs), which identified anomalies in NCC operations and recommended that KPLC be removed from managing the key role to curb abuse.

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