By  Njiriani  Muchira

Ongoing reforms in the power sector are threatening to flay the influence of Kenya Power in the energy sector.

The country’s utility firm is fast losing favour among consumers and calls for an end to its monopoly on electricity distribution have been snowballing. 

“The problems we are experiencing in the energy sector emanate from lack of competition,” said Kwame Owino, the chief executive of the Institute of Economic Affairs. “I think Kenya Power needs competition.”

In the US, for instance, two firms top the list of the most hated utility companies according to a survey on customer satisfaction index.
 

Customer needs
The two companies, Long Island Power Authority and Northeast Utilities, are reviled because of familiar shortcomings; rate hikes and overbilling mistakes, recurring blackouts, widespread outages, fast in disconnections and slow in reconnections, unfriendly customer service among others.

The Energy Regulatory Commission (ERC) has announced that private firms and county governments can seek licences to distribute electricity.

ERC Director General Kaburu Mwirichia a fortnight ago said county governments will have the independence to distribute electricity within their jurisdictions if they so wish, ultimately cutting link with Kenya Power.

“County governments will have powers to distribute electricity. This is well guaranteed in the Constitution,” said Mwirichia, adding that the right for counties to distribute electricity is among issues that will be included in the new Energy Policy and Energy Bill currently under works.

This means county governments and other distributors would be able to buy electricity directly from generators like KenGen and independent power producers (IPPs) and sell to consumers.

The move comes hot on the heels of an application to ERC for a licence to transmit and supply bulky electrical energy across the country by Kenya Electricity Transmission (Ketraco).
 

It is hoped that the move will help boost efficiency and lower power tariffs in the country. According to Kenya Association of Manufacturers (Kam) Chief Executive Betty Maina, high energy costs and erratic power supply continue to put Kenya’s manufacturing sector more in a quandary.

“Often, industries go for up to six hours a week or more without power,” Ms Maina says. “This is unfortunate for a country whose long term economic blueprint (Vision 2030) hinges on growth of the manufacturing sector.”

Electricity demand in Kenya has been growing steadily over the years and currently, the cumulative shortfall has reached approximately 200MW.

The new move is therefore expected to help increase access to electricity, customer connectivity, improve quality of supply and reduce transmission losses that currently cost the country about $17 million (Sh1.4 b) per year.

According to a World Bank report published in 2010, electric power transmission and distribution losses (kWh) in Kenya stood at 1068 in 2009 up from 1057 (KWh) reported in the previous year (2008).

More competition
For Kenya Power, the once giant utility company formerly known as Kenya Power and Lighting Company (KPLC), unbundling of various functions that have been transferred to other entities has left the company overly exposed.

Before the unbundling commenced sometimes in 1997, KPLC was a monopoly responsible for electricity generation, transmission and distribution.

But with the establishment of KenGen in 1997, KPLC lost the generation mandate and two years ago the formation of the Kenya Electricity Transmission Company (Ketraco) has resulted in KPLC ceding the transmission mandate as well.