Kenya needs to tame independent power producers whose electricity is sold to Kenya Power at exorbitant prices, trade unions have said.
This would be through such measures as revoking the power purchase agreements (PPAs) that some of the electricity generators have signed with Kenya Power.
Central Organisation of Trade Unions (Cotu) Secretary General Francis Atwoli on Thursday said to lower the cost of power, the government should kick out IPPs and instead rely on State agencies such as KenGen for the production of power.
“For the cost of electricity to be reduced, the Kenyan government must seek to have more control over costs and could potentially offer electricity at more competitive prices,” Mr Atwoli said when he appeared before the National Assembly’s Departmental Committee on Energy that is doing an inquiry on the high cost of electricity.
“This can be done by revoking all PPAs that have been signed with various IPPs and instead engage KenGen or establish other State parastatals to handle electricity generation and supply.”
He said having full control over the energy mix by prioritising the use of cheaper sources of energy, such as hydroelectric or geothermal power, would reduce overall costs.
The cost of a unit of power rose to Sh33.50 last month among households consuming at least 100 units a month from Sh22 in August last year. Costs went up significantly following the introduction of a new tariff.
“Affordable electricity will not only improve workers’ livelihoods but also boost industrial competitiveness, foster job creation and attract investments,” said Atwoli.
The structure of the PPAs have been cited among the causes of high cost of power. Some of the clauses in the contracts guarantee payments to the power producers even in instances where they do not supply electricity to Kenya Power.
Power sector players have in the past defended such clauses, saying that investors need guarantees that their heavy investments will give a return.
They note the unique nature of the electricity sector, where there is only one client – Kenya Power.
The Law Society of Kenya (LSK), also appearing before the energy committee, said contracts that have a heavy toll on livelihoods of Kenyans can be challenged in court.
“There is no contract that is permanent, life itself is not permanent,” said LSK’s deputy secretary in charge of public interest Collins Odhiambo.
“We should not be given the excuse that this is a permanent contract and there is nothing we can do about it.
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“If it is difficult we can make constitutional references in court. If something is anti-citizens…the courts can pronounce themselves over it. We have an opportunity to leverage even through litigation on how we can protect the consumers.”
The Kenya Medical Association said high power cost had become a strain on hospitals, impacting on their capability to provide services to Kenyans and is a major stumbling block to achieving the goal of Universal Health Care. LSK also said breaking up Kenya Power’s monopoly could yield a reduction in power prices.