The cost of power in Kenya is set to rise again after the regulator, Energy and Petroleum Regulatory Authority, (EPRA), acceded to a request from Kenya Power Company for a tariff review.

For some bands of consumers, the increase is substantial consumers. This could not have come at a worse time.

Kenya Power has been buffeted over the years by a myriad of challenges, some self-inflicted, and others imposed on it by the Government, the company’s main shareholder. Kenya Power’s answer to these challenges has always been to raise the cost of power instead of resolving the issues. Many, though, are beyond its control.

Unfortunately for the country, Kenya Power remains the fulcrum around which power revolves. All the inefficiencies in the entire power sector coalesce around the feet of Kenya Power. This is the sink into which all ‘dirt’ is poured. This mess then finds a vent through higher prices to the consumer.

And because demand for power is highly inelastic, the capacity of this vent to absorb this dirt is almost perfectly elastic, thus the complacency by the Government over the years.

Unless Kenya Power heals, there is no way the country will ever enjoy cheap power. There is no way the country will ever be competitive both in the domestic and export markets. There is no way the Kenyan economy will rise to its huge unrealised potential. Does the Government grasp this?

The biggest challenge that must be tackled before any other measure can hope to make a difference is the outsized problem of the Independent Power Producers (IPPs). Kenya Power signed supply contracts with these IPPs that are so unbelievably lopsided. Kenya is stuck with them until they run out.

The measures that are needed to change this disastrous trajectory are well known. Deal with IPPs. Yes, they have contracts, but they can be brought to the negotiating table for a review. For instance, the Government can take out a long-term concessional loan from multilateral bodies like the World Bank as part of a major restructuring of the sector to make a bullet payment to the most notoriously priced IPPs, whose tariffs disproportionately skew power costs upwards, and take them out of service.

Synchronise this exercise with the bringing onstream of electricity from much cheaper sources like Ethiopia, Uganda and the solar, wind and geothermal sources that are in various stages of construction approvals and completion. Clean out Kenya Power. The sickness in that institution is well documented, and many restructuring proposals are simply gathering dust at the shelves of successive cabinet secretaries of energy. The same scenario obtains with the incumbent.

Clean out the entire energy sector. The problems of the entire power sector are always brought to the feet of Kenya Power to resolve (read load onto consumer tariffs to finance).

Stop loading Kenya Power power bills with extraneous charges that the Government is running away from financing. These are budgetary items that the Government should fund through the Consolidated Fund. Grow the economy, generate more taxes that will enable the Government to finance these items via the budget process.

Finally, introduce competition into power retailing. The monopoly of Kenya Power will never allow the electricity sector achieve competitiveness and efficiency even in a hundred years! The question is very simple. Is President William Ruto ready to tackle the elephant in the power room—Kenya Power? So far, indications are that, like his predecessor, he’ll be long on pronouncements, but short on action!

The President must bite the bullet. Very hard decisions, even harsh, must be made. He needs to appreciate that failure to act and resolve the power conundrum will have devastating effects on the Kenyan economy and cost of living which his Government is desperately trying to bring down. None of these will be achieved at the current cost of power, and there’ll be political consequences.

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