HIGH COST OF ELECTRICITY: WILL THE NEW LAW MAKE A DIFFERENCE?

The Nairobi Senator recently introduced a Bill in the Senate addressing the high cost of electricity in the country. The Bill, which was passed unanimously, seeks to enhance transparency in energy purchase agreements (EPAs) as a way to reduce electricity costs for consumers. While this legislative move is commendable, many Kenyans are still unaware of the specific Independent Power Producers (IPPs) involved and the varying costs at which they sell electricity to Kenya Power.

According to data from my research, Muhoroni Gas Turbines supply the most expensive electricity to the national grid at a staggering Sh 56.73 per unit. Iberafrica Power follows at Sh 28.24 per unit, with Rabai Power coming third at Sh 24.04. Interestingly, Gulf Power—where Kenya Power holds a stake—supplies electricity at Sh 23.23 per unit. On the other end of the spectrum, KenGen provides the most affordable electricity at Sh 4.71 per unit, while Orpower supplies it at Sh 14.33.

Notably, there was a previous attempt by the government to renegotiate wholesale tariffs with these power producers in an effort to lower the costs and ease the burden on consumers. However, the producers declined the proposal. With the introduction of this new law, many are now questioning whether it will finally bear fruit and bring the much-needed relief to electricity users.

What is perhaps most concerning is that some of the contracts with power producers span between 20 and 25 years. This long-term commitment raises important questions about the flexibility of these agreements and the government's ability to implement reforms that could benefit ordinary Kenyans.