The Kenya Electricity Supply Industry (ESI) is one of the sub-sectors in the energy sector over which the Ministry of Energy (MoE) exercises oversight on behalf of the Government of Kenya (GoK).
The energy sector has been undergoing restructuring and reforms since the mid-90s, which culminated in the enactment of the Energy Act, No 12 of 2006 (the Act).
Under the Act, MoE is responsible for formulation and articulation of policies through which it provides an enabling environment to all operators and other stakeholders in the energy sector.
The Energy Regulatory Commission (ERC) was established in 2007 under the Act as an autonomous, independent energy sector regulator with powers to, inter alia, formulate licensing procedures, issue licenses and permits, make recommendations for the necessary regulations to be issued by the Minister, formulate, enforce and review environmental, health, safety and quality codes and standards, set, review and adjust electric power tariffs, approve power purchase and network service contracts, examine and approve meters, investigate complaints between parties, accredit energy auditors, ensure competition, collect and maintain energy data, protect stakeholders interests, and prepare an indicative national energy plan.
Principal operators in the ESI are the Kenya Electricity Generating Company (KenGen) which accounts for close to 80% of generation, the balance being provided by five (5) Independent Power Producers (IPPs), namely Iberafrica Power (EA) Ltd, Tsavo Power Company Ltd, OrPower4 Inc and Mumias Sugar Company Ltd. A sixth IPP, Rabai Power Ltd is set to commence operations in October 2009.
The Kenya Power and Lighting Company (KPLC) is responsible for transmission, distribution and retail supply of electrical energy to end users. KPLC purchases power in bulk from KenGen and the IPPs through bilateral contracts or Power Purchase Agreements (PPAs) approved by ERC
Other operators in the ESI include James Finlay, Sotik Tea Company, Sotik Highlands Tea Estate, Oserian Development Company, Pan African Paper Mills, Unilever Tea Kenya Ltd and Tiomin, who are licensed to generate electrical energy for own use.
Other players in the ESI are:
- The Rural Electrification Authority (REA), mandated to, inter alia, develop and update the rural electrification master plan, implement the rural electrification programme and promote the use of renewable energy sources.
- The Geothermal Development Company (GDC) formed in 2009 for the purpose of exploiting the hugely untapped geothermal energy potential, and
- The Kenya Electricity Transmission Company (Ketraco), also formed in 2009 to develop new transmission lines.
(a) Review of and advise on government policy on the electricity sub-sector;
(b) Preparation of strategic and operational plans;
(c) Licensing of the generation, transmission, distribution and supply of electricity;
(d) Reviewing of power purchase agreements and network service contracts;
(e) Development and enforcement of regulations, standards and licence conditions;
(f) Collection and maintenance of information relating to the technical regulation of the electricity sub-sector;
(g) Generation and transmission expansion planning;
(h) Regulating the use of electrical energy including metering and meter certification;
(i) Licensing of electricians and registration of electrical contractors, and
(j) Investigation and determination of complaints and disputes.
The Electricity Department comprises two sections, namely Power Systems and Consumer Affairs
1. The Power Systems Section is responsible for:
(a) Reviewing, issuing, renewing, modifying, suspending or revoking licences and permits for the generation, transmission, distribution and supply of electricity;
(b) Reviewing of power purchase agreements and network service contracts;
(c) Monitoring the technical performance of electric power generators, transmitters, distributors and suppliers;
(d) Development and enforcement of regulations, standards and licence conditions;
(e) Collection and maintenance of information relating to technical regulation for the electricity supply industry, and
(f) Generation and transmission expansion planning.
2. The Consumer Affairs Section is responsible for:
(a) Developing regulations and standards for the supply and use of electrical energy including customer charters;
(b) Regulation of the supply and use of electrical energy including metering and meter certification in coordination with other statutory bodies and agencies;
(c) Regulation of electrical installation work including the licensing of electricians and registration of electrical contractors as well as monitoring their performance;
(d) Providing technical input in the review of retail electricity tariffs, and
(e) Investigation and determination of complaints and disputes.
