Experts hail Chirchir's power distribution zoning plan – The Star Kenya
Energy experts have welcomed a proposal to allow wholesalers purchase power at a discount from Kenya Power and resell it to consumers.
The Cabinet Secretary nominee for Energy and Petroleum Davis Chirchchir presented the proposal at at a Parliamentary vetting session on Tuesday.
“Why not zone the country into pre-paying wholesalers who purchase power at a discount and leave it to them to deal with the consumer?,” Chirchir said.
Chirchir wants each county to have its power distributor similar to the scenario in Nigeria where local authorities buy power from the Power Holding Company of Nigeria (NEPA) and resell it to residents.
He believes that this will sort out power distribution inefficiencies and system losses at the country’s sole power distributor which has seen it struggle, save for the ongoing energy reforms.
Energy expert Tom Ogweno termed Chirchir’s proposal revolutionary.
”That is exactly what Kenya was to do two decades ago. The current over seven million customers are too much for a single utility firm to serve. Energy zoning will bring about efficiency and competitiveness,” Ogweno told the Star.
He was however quick to add that the zoning should be handed to county governments and not selfish private entities that might end up exploiting users.
“This will also create a new revenue stream for counties and assure Kenya Power of its full revenue,” Ogweno said.
His sentiments are supported by Elizaphan Gikunju who is against monopolising power distribution in the country.
“Kenya Power has the infrastructure in almost every county. Zoning of power will increase competitiveness and spur an economic revolution in counties. Electricity is key to social economic growth,” Birundun said.
The Electricity Sector Association of Kenya (ESAK) chairperson George Aluru has also welcomed Chirchir’s proposal, saying it will actualise provisions of the Energy Act, 2019.
”Having regional sub-KPLCs or private concessions to distribute power to the retail segment will allow for better management of customers and the network,” Aluru said.
He adds that bulk purchases of power from the utility firm will do good for the firm’s financial status while spreading risks and operational costs releasing related to maintaining customers.
”The concessions must however be viable from an investment perspective. Customers stand to benefit from better services and ease of access and resolution of issues by local concessionaires,” he said.
Kenya has been mulling ending Kenya Power’s monopoly, with the Ministry of Energy releasing a white paper on the same in July this year.
It has proposed that the Rural Electrification and Renewable Energy Corporation (Rerec) handle the household distribution while Kenya Power handles the commercial and industrial clients.
The proposals come at a time when the power distributor is busy cleaning its books after an audit revealed close to Sh120 billion in debt that is threatening to plunge the firm into insolvency.
The Nairobi Securities Exchange (NSE) listed power firm only returned to profitability last year after a series of loss-making arising from late meter readings, power theft and other related system losses.
It registered a Sh1.4 billion net profit for the financial year ending June 2021, a marked improvement from Sh939 million loss in the previous financial year.
System losses, which had risen to 25.21 per cent in the first half of the year, were reduced to 22.7 per cent in the second half.
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