- The new Energy (Electricity Market, Bulk Supply and Open Access) Regulations, 2024, stipulate that a consumer will not get electricity from multiple suppliers.
- This means that more than 9.2 million Kenya power customers will be tied to the utility firm even as the government seeks to end the electricity supply monopoly.
Image: FILE
The government’s move to liberalise the country’s electricity market will force consumers to get power from only one distributor at a time.
The new Energy (Electricity Market, Bulk Supply and Open Access) Regulations, 2024, stipulate that a consumer will not get electricity from multiple suppliers.
However, the regulations which were gazette by Energy Cabinet Secretary Davis Chirchir, do not provide details on how current Kenya power customers will be allowed to switch to other suppliers.
This means that more than 9.2 million Kenya power customers will be tied to the utility firm even as the government seeks to end the electricity supply monopoly.
Section 145(4) of the Act states that; "a distributing firm may supply a consumer provided that the said consumer has no existing contract for the supply of electrical energy with any other licensee.”
"A consumer shall choose his retail supplier provided that the said consumer shall not have two supply contracts for the same premises.”
The clause would be a strategy to block customers from defecting en masse from Kenya Power into new electricity distributors once suppliers roll out new connections.
On Tuesday, energy sector analysts opined that the Energy Petroleum Regulatory Authority will have to come up with finer details on transition to protect Kenya Power and also ease panic
"That is upon Epra given that it is a regulatory measure," Joseph Odongo who works for Kenza, a consortium lobbying for a liberal energy market said.
Odongo noted that Kenya Power and other suppliers will also unveil their protocols that will guide the entry and exit of existing contracts to address any fears.
"How to enter into a contract or exit would be provided by individual firms against potential clients,'' he said.
Kenya Power had 9.2 million customers as of June last year, but the period marked the slowest rate of customer additions at 318,217.
It remains unclear whether the CS will make changes to the particular clauses and introduce a transition period for existing Kenya Power customers to opt for the new distributors.
There have been fears that opening up the electricity distribution to other players would lead to huge defections by disgruntled customers.
Some of the key highlights of the regulations include allowing Kenya Power to allow other distributors to use their transmission lines for a fee to reach customers.
This would mean that many Independent Power Producers (IPPs) sell their electricity directly to Kenyans, ending Kenya’s monopoly.
Martin Chomba, chairperson of the Petroleum Outlets of Kenya said the onus of ensuring that the transition is regulated for the benefit of Kenyans is on the Epra.
"It is upon the Epra to regulate the changes and make sure they benefit the common Mwananchi,’’ Chomba told CNBC Africa.
Chomba said the liberalization of the country’s electricity generation and supply will lead to competitive pricing that will see Kenyans enjoy cheaper tariffs.
"Efficient players will attract more customers and make the Kenyan energy more competitive," he said.
There have been concerns that Kenya’s biggest problems in the electricity market were a result of a monopoly over the transmission and distribution of electricity in the country by two state agencies.
Transmission and operation of the transmission infrastructure are done by the Kenya Electricity Transmission Company Limited (KETRACO), while Kenya Power distributes it to consumers.
The new regulations are a result of a push by Independent Power Producers (IPPs) who have been keen to generate electricity and supply power to consumers.
Some analysts say the move will see the new players licensed to cover areas where Kenya has no reach and therefore have less disruption on the utility’s subscribers.
“My thinking is that customers already covered by the grid will not be affected as the new players will be tasked to cover areas not covered by Kenya power," said energy expert Morris Oduor.
“Opening up the market allows for transparency in pricing through standardised contracts for various industry players.’’
Energy liberalization activist Kentas Ole Tenei said the new laws would benefit consumers in the long run.
He said Kenya Power and Ketraco will no longer serve as the intermediary operators.
“We are most likely to see lower tariffs going forward and in the long run with the possibility of cheaper electricity,’’ Ole Tenei said.