Senators have passed a bill
seeking to make energy purchase
agreements transparent to curb high
cost of electricity in the country.
The Energy (Amendment) Bill,
2023, sponsored by Nairobi Senator
Edwin Sifuna, now heads to the
National Assembly.
The legislation comes as consumers
are grappling with high energy prices.
The Bill, which seeks to overhaul
contracting of energy purchase
agreements, got near unanimous
backing on Wednesday, with senators saying it is a much-needed
intervention.
According to the bill, Kenya Power
will purchase electricity from private
energy generators before establishing
the need for additional energy.
“Bill seeks to create transparency
in the purchase of electric energy
from private generators, ensure the
contracts entered into are financially
sound to protect the end user of
electricity from inflated electricity
costs,” the proposed law states.
It says the purchase of power
from private energy generators by
Kenya Power is subject to principles of public finance as envisaged under
Article 201 of the constitution, which
includes openness and accountability.
The Bill says the energy purchase
agreement shall comply with the
principles of public finance enshrined
in Article 201 of the constitution.
They include openness and
accountability; public participation
and good governance to ensure
public funds are used in a prudent
and responsible way.
The Bill says Kenya Power shall,
prior to buying electricity from
independent power producers,
conduct a feasibility study to
establish whether there is enough
demand for electricity purchase
which cannot be met by the existing
production.
Kenya Power will also be required
to give priority to a generating entity
producing energy through renewable
technology.
The Bill also seeks to bar granting
of licenses to power-generating
companies that do not disclose
beneficial owners.
There has been public outcry with
partners demanding a more open
contracting process with the current
system faulted for its opaqueness.
In July last year, the Central
Organisation of Trade Unions
asked the government to revoke all
Power Purchase Agreements with
Independent Power Producers and
renegotiate better terms.
Appearing before the Energy Committee of the National Assembly,
Cotu secretary general Francis
Atwoli said IPPs should be tamed
to address the high cost of electricity.
In his submissions, the COTU boss
further said most of the IPPs have
tough and long-term contractual
obligations that make it hard for
any changes to be made once PPAs
are signed even if market conditions
or energy demands change.
