Senate unanimously passes Sifuna’s bill on high cost of electricity

Senators have passed a bill seeking to make energy purchase agreements transparent to curb high cost of electricity in the country.

The Energy (Amendment) Bill, 2023, sponsored by Nairobi Senator Edwin Sifuna, now heads to the National Assembly.

The legislation comes as consumers are grappling with high energy prices.

The Bill, which seeks to overhaul contracting of energy purchase agreements, got near unanimous backing on Wednesday, with senators saying it is a much-needed intervention.

According to the bill, Kenya Power will purchase electricity from private energy generators before establishing the need for additional energy.

“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 and good governance to ensure public funds are used in a prudent and responsible way.

The Bill says Kenya Power shall, prior to buying electricity from independent power producers, conduct a feasibility study to establish 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 granting of licenses to power-generating companies that do not disclose beneficial owners.

There has been public outcry with partners demanding a more open contracting process with the current system faulted for its opaqueness.

In July last year, the Central Organisation of Trade Unions 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 should 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.