Why your power bills will keep on going up

The much-hyped end of Kenya Power’s monopoly might not offer electricity consumers relief from high power bills after all, a State official has warned.

Energy Principal Secretary Joseph Njoroge said setting up another power distributor to rival the utility firm would require huge investments in new infrastructure, making it unattractive to energy industry players.

The PS, who spoke in Nairobi on Monday, was reacting to proposals in the Energy Bill that, among other things, seeks to introduce competitors in the power retail segment in the hope that it would end Kenya Power’s monopoly that has been blamed for the continued rise in electricity bills for consumers and incessant inefficiencies.

Competition is expected to give consumers a choice and increase affordability.

The proposal to bring on board more players has been lauded by many Kenyans, especially coming at a time when Kenya Power is on the spot for a billing gaffe that saw consumers’ bills inflated.

The power distributor has blamed the mix-up on a technical hitch following a change in its IT systems, as well as the slow processing of tokens for its prepaid customers.

Mr Njoroge, however, was quick to point out that increased competition in the sector would not be a panacea for high power bills and Kenya Power’s perceived inadequacies.

Transmission charges

He said bringing on board additional players would require massive investments in infrastructure and that investors would take decades to match what Kenya Power already has in place.

In the absence of new infrastructure, the other alternative would be to share infrastructure with Kenya Power on a commercial basis, which would mean that in addition to charging for power delivered to consumers, the new entities would also need to pass transmission charges to their customers, making their service more expensive than that of the State Corporation.

“A new player would have to duplicate what Kenya Power has done. Another operator would have to invest in an electricity transmission system so as to be an alternative to Kenya Power. It would be expensive,” he said, adding: “It could also entail wheeling charges whereby someone owns the network and the operator pays to use the network to transmit power acquired from an electricity generator.”