Senators should help tame electricity cost
The ongoing hearings by the Senate should not end up as a talk shop. They must be translated into recommendations that have the net effect of bringing down the cost of electricity.
Data analysis has indicated that Kenya has one of the highest electricity tariffs in the region, a fact that makes it not so competitive in terms of encouraging investments in industrial plants. Indeed, there are one too many factories that are powered by gas because they cannot afford either the high prices or the unreliability of electricity supply. This makes it critical for Kenya to find solutions that will bring down the cost of power so that it can also encourage uptake.
That Senate has turned its spotlight on Independent Power Producers (IPPs) who charge way too much yet they supply far much less electricity compared to KenGen is a step in the right direction. The public will also be interested to know why IPPs charge for power in dollars, and why the government allows this to happen, when they can charge in shillings.
Electricity is a public good. The government ought to be interested in processes that push up its cost because it has a direct effect on the basket of goods that are used to measure inflation. These should be revisited and reviewed.
However, even as it does this, it will be imperative, going forward, for the National Treasury to also review the taxes it loads on electricity. Already, domestic consumers have been complaining that taxes and levies consume about half of the amount they pay for tokens. This is neither fair nor sustainable and there has been a significant shift towards use of solar energy and generation of own power at both domestic and industrial level. This is a risk that the electricity supplier, Kenya Power, must be alive to because a day will come when that market will be severely disrupted by new sources of energy. It is only a matter of time.
But even as the relevant agencies carry out the process review, it is imperative for the Senate to be seen to be providing leadership now that it is seized with the matter. And the best place to start would be with piling pressure on IPPs to review their tariffs and change the currency they are paid with a view to making electricity more affordable from a consumer point of view and without jeopardising the sustainability of the IPPs.












