- Bill seeks to ensure the contracts entered into are financially sound to protect the end user of electricity from inflated electricity costs.
- The Bill says the energy purchase agreement shall comply with the principles of public finance enshrined in Article 201 of the Constitution.
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Kenya Power will purchase electricity from private energy generators before establishing the need for additional energy if a Bill before the Senate is enacted.
The Energy (Amendment) Bill, 2023 sponsored by Nairobi Senator Edwin Sifuna seeks to enhance transparency in energy purchase agreements.
“Bill seeks to create transparency in the purchase of electric energy from private generators, ensure the contracts entered into are financially sound to protect the end user of electricity from inflated electricity costs,” the proposed law states.
It says the purchase of power from private energy generators by Kenya Power is subject to principles of public finance as envisaged under Article 201 of the Constitution, which includes openness and accountability.
The Bill says the energy purchase agreement shall comply with the principles of public finance enshrined in Article 201 of the Constitution.
They include openness and accountability; public participation; good governance to ensure that public funds are used in a prudent and responsible way and sustainability.
The Bill says Kenya Power shall prior to buying electricity from independent power producers conduct a feasibility study to identify whether there is enough demand for electricity purchase which cannot be met by the existing production.
Kenya Power will also be required to give priority to a generating entity producing energy through renewable technology.
The Bill also seeks to bar the granting of licenses to power-generating companies that do not disclose beneficial owners.
In July, the Central Organisation of Trade Unions (COTU) asked the government to revoke all Power Purchase Agreements with Independent Power Producers and renegotiate better terms.
Appearing before the Energy Committee of the National Assembly, COTU Secretary General Francis Atwoli said IPPs have to be tamed to address the high cost of electricity.
In his submissions, the COTU boss further said most of the IPPs have tough and long-term contractual obligations that make it hard for any changes to be made once PPAs are signed even if market conditions or energy demands change.
He said the government must rely on State-owned power firms and only engage IPPs to supplement the shortages.