Senators Now Want KenGen To Sell Electricity Directly To Consumers In Bid To Cut KPLC Monopoly

Senators are keen to end Kenya Power monopoly as the cost of electricity continues to soar higher.

The lawmakers want power generator, KenGen, to be allowed to sell electricity directly to consumers, further calling for audit of contracts awarded to independent power producers (IPPs).

According to the Senate Senate Energy Committee chairperson Wahome Wamatinga, KenGen sold 8,443 gigawatts hours of electricity in the year ending June 2021.

This made up 70 percent of the total power supply, and  the company was paid KSh 44.8 billion for the same.

In a move that was termed punitive, it emerged that independent power producers supplies the remaining 30 percent of power and received KSh 34 billion.

KenGen sells a unit at KSh 5.41 while independent power producers charge between KSh 9 and KSh 173 per unit and are paid in US dollars and not Kenya shillings.

The Nyeri Senator observed that if KenGen was to supply 100 percent of power, they would have been paid KSh 64 billion; saving KSh 34 billion.

“As a committee, we note that the cost of electricity charged by the IPPs is 30 times compared to what KenGen charges

“If we want to industrialise and attract international manufacturing firms, then the cost of manufacturing has to be lowered by bringing down the high cost of electricity,” Wamatinga said.

Elsewhere, Kenya Power doubled its net profits in the year that ended June 30, 2022.

According to the company’s end-year results which was released on Thursday, October 27, KPLC’s earnings in the previous year shot down from KSh 1.5 billion to KSh 3.5 billion.

The impressive growth was attributed to growth in sales by at least 6.9 percent and improvement of 1.5 per cent in system efficiency.

The reduction in operation costs by use of strategic cost management initiatives was also attributed to the growth.

The other contributing factor was a 40.2 per cent increment in finance costs, attributable to the depreciation of the Kenya Shilling against major world currencies.

This resulted in a 37.5 per cent decline in gross earnings to settle at 5.12 billion compared to the previous trading period.

“Despite some curve balls, all our core business lines have registered remarkable improvement,” Acting managing director Geoffrey Muli said.