Taskforce wants Ketraco to control energy mix

Kenya Power will lose its control on energy mix should new proposals meant to lower the cost of electricity be implemented.

The proposal is one of the recommendations by the John Ngumi-led Presidential Taskforce on Review of Power Purchase Agreements (PPAs) that was appointed in March to look into the causes of the sky-high electricity prices and propose practical solutions.

Kenya Power is currently the Independent System Operator (ISO) that controls what mix of electricity from different producers is supplied to the national grid through the National Control Centre (NCC), whose role should be to ensure consumers get the cheapest available power.

But the company’s earnings are pegged on getting as much money as possible from this electricity, making it anything but an independent system operator as required by law.

The Energy Act, 2019, stripped the company of this mandate by requiring that the ISO can neither be a seller nor buyer of electricity, primarily to prevent this conflict of interest.

However, this has not been implemented, leaving consumers at the mercy of Kenya Power. 

“The system operator shall not be involved in the direct or indirect buying or selling of electrical energy,” the Act reads.

Thermal power producers

But the taskforce, in its report to President Uhuru Kenyatta, wants Kenya Power to be ripped of its management of the NCC. It proposes this function be transferred to the Kenya Electricity Transmission Company (Ketraco), which is an independent player as required by the Act.

“The taskforce observed that the proposed designation of a system operator has not been implemented. The law provides that the system operator shall not be involved in the direct or indirect buying or selling of electrical energy. This implies that Kenya Power as a distribution company cannot be designated as an ISO,” says the report.

The taskforce lamented frustration by management of Kenya Power in giving it access to crucial documents required for its mandate, and said it even had to go through the Board to pressure the monopoly’s management to release details.

Kenya Power faces accusations of giving dispatch priority to expensive thermal power producers as compared to cheaper sources such as geothermal and hydro, piling pressure on electricity users through high fuel cost charges. 

Parliament’s energy committee last week heard that the formula Kenya Power uses to reimburse thermal power producers for fuel costs incurred in power generation is vague, opening the door for accusations of collusion between the parties.