Uhuru orders Kenya Power to immediately lower electricity price, gives CS deadline

President Uhuru Kenyatta has ordered the lowering of electricity prices in Kenya within the next four months.

According to a report from President Kenyatta seen by Pulse Live news desk on Wednesday, September 29, he raised concern over the irregular power purchase agreements entered by Kenya Power.

“The consequence of the proposed interventions is that a consumer who previously spent Sh500 per month on electricity shall by 31st December 2021 pay Sh330 per month. This cost reduction will be achieved through the reduction of the consumer tariffs from an average of Sh24 per kilowatt-hour to Sh16 per kilowatt-hour which is about two-thirds of the current tariff,” the report reads.

On March 29, President Kenyatta constituted a task force to review the power purchase agreements after it was discovered that independent power produces sold electricity to Kenya Power at inflated prices.

The President has directed Energy CS Charles Keter to ensure the immediate implementation of all the recommendations of the Taskforce by December 25, 2021.

Other recommendations include;

In line with the constitutional imperative for transparency in the public sector, Kenya Power’s annual reports should include the names and beneficial ownerships of all IPPs with which it has contractual arrangements.

Review and Renegotiations with Independent Power Producers (IPPs) to secure an immediate reduction in Power Purchase Agreements (PPA) tariffs within existing contractual arrangements;

Cancellation with immediate effect of all unconcluded negotiations of Power Purchase Agreements and ensure future PPAs are aligned to the Least Cost Power Development Plan (LCPDP).

Kenya Power to take the lead in the formulation and related PPA procurement of the Least Cost Power Development Plan (LCPDP);

Kenya Power to institute Due Diligence and Contract Management frameworks for PPA procurement and monitoring along the lines of the drafts provided by the Taskforce.

Kenya Power to institute one and five-year rolling demand and generation forecasts and associated models;

Kenya Power to adopt standard PPAs and proposed Government Letters of Support (LOS) along the lines of the drafts provided by the Taskforce;

Kenya Power to undertake a forensic audit on the procurement and system losses arising from the use of Heavy Fuel Oils (HFOs);