CS Matiang’i says cost of fuel and electricity to reduce

Fuel pumps at a petrol station in Nairobi February 18, 2021 [Elvis Ogina, Standard]

Just days after President Uhuru Kenyatta reshuffled the top leadership at the Energy docket, there will be a public engagement next week on the thorny issue of the cost of power.

Interior Cabinet Secretary Fred Matiang’i who is also the chair of the Cabinet committee on implementation of government projects and programme is set to lead a sector stakeholders engagement to discuss the matter. 

The move is in line with President Kenyatta's directive to implement the John Ngumi led Taskforce report to cushion Kenyans from the high cost of fuel and electricity by December.

The Presidential taskforce report recommends a review of the Power Purchase Agreement (PPAs) with Independent Power Producers (IPPs)

Immediately after the release of the report last week at State House, Energy Cabinet Secretary Charles Keter was moved to Devolution Ministry and Principal Secretary Eng Joseph Njoroge to Transport.

“In light of the changes at the Ministry of Energy announced by the President we shall this week start an aggressive programme to reduce the cost of fuel and electricity,” Dr Matiangi said, when he presided over a funds drive for the construction of the headquarters of the Seventh Day Adventist Church in Isinya, Kajiado County, on Sunday.

The CS also revealed plans to overhaul Kenya Power Company (KPLC).

“Ngumi team proposed a overhaul of KPLC to be supervised by Cabinet and a review of the PPAs with the private firms," said Matiang’i. 

He said he will lead the government agencies in the energy sector into the meeting where he promised to ensure that the recommendations of the task force are fully implemented.

The task force identified the vast differential between KenGen and IPPs tariffs and electricity dispatch allocations, the lack of proper demand forecasting and planning as the main cause of the irreconcilable projections against demand.

It also noted that the existing risk allocation imbalances between KPLC and IPPs exacerbated by poor contract management frameworks, and an uncoordinated institutional architecture that inadvertently contributes to enhanced operational costs passed on to consumers.

Kenyans have been up in arms especially after Energy and Petroleum Regulatory Authority (EPRA) announced high fuel prices.

Just as the State, MPs have been under fire over bad legislation and a conspiracy between cartels in the energy sector and top civil servants in the ministry.

The President directed the Ministry of Energy to reduce the cost of electricity by over 33 per cent within four months.

According to the proposed interventions a consumer who previously spent Sh500 per month on electricity shall by the end of December, pay Sh330 per month, this will be achieved through the reduction of the consumer tariffs from an average of Sh24 per kilowatt hour to Sh16 per kilowatt hour which is about two-thirds of the current tariff.

ODM leader Raila and other presidential hopefuls have also weighed in on the matter, calling on the state to come up with interventions to lower the cost of energy.

Matiangi told the congregation that the government has identified the problem in the sector which he did not divulge.

“Together with my colleagues from the sector I promise to attend and I will be open and candid in explaining what the challenges are and how we intend to solve them,” he said.

“The high costs are affecting the country’s competitiveness to attract local and international and investors and at the same time businesses profitability,” he added.

The KPLC board is under probe by the Ethics and Anti Corruption Commission over tender wars and interference in management that saw the ex CEO Benard Ngunyi unceremoniously exit.

In attendance were CS Eugene Wamalwa (Defence), Joe Mucheru (ICT) Solicitor General Kennedy Ogeto, PS Nelson Marwa and CASs Zack Kinuthia and David Osiany and a host of MPs.

They called on the youth to take advantage of the mass voter registration that kicked off yesterday to enlist as voters in large numbers.