The government has banned current Kenya Power and Lighting Company (KPLC) customers from moving to other firms despite opening up of the electricity distribution market in Kenya.
The Energy (Electricity Market, Bulk Supply and Open Access) Regulations, 2024 do not allow existing KPLC customers to decamp from the electricity provider to the other firms that are set to join the power supply sector.
In the regulations gazetted by Energy CS Davis Chirchir in February 2024, the customers are tied to the power firm indefinitely despite efforts to end the monopoly KPLC has enjoyed for years.
These regulations have protected KPLC from mass decamping with clauses barring its customers from signing deals with the other distributors.
“Subject to section 145(4) of the Act, a licensee may supply a consumer provided that the said consumer has no existing contract for supply of electrical energy with any other licensee,” the draft regulations read in part.
Besides, the regulations have not outlined a transmission period upon which KPLC customers will be able to enter deals with other power distributors.
EPRA Draft Ends KPLC Monopoly
The Energy and Petroleum Regulatory Authority (EPRA) drafted the regulations to allow private investors take part in electricity distribution in Kenya.
EPRA Director General Daniel Kiptoo Bargoria said the Regulations were developed based on a petition by the Independent Power Producers (IPPs) to allow open access to power transmission and distribution.
He explained that the Regulations will be the crucial to opening up new investment opportunities and enhancing grid reliability.
Also Read: KPLC Shares Tips on How to Win Its Lucrative Tenders
They will apply to the generation, importation, exportation, transmission, distribution, and retail of electric energy.
The Regulations were published as part of the efforts to implement the Energy Act 2019 with the aim to promote competition, efficiency, and reliability.
“The regulations provide for non-discriminatory open access to transmission or distribution system so as to enhance competition, “read the notice.
Consumers Buying Directly from Private Distributors
This allows consumers to purchase electricity directly from licensed IPPs rather than only from KPLC.
The Regulations further focuses on opening up electricity networks owned by Kenya Power and other operators.
“A licensee shall provide non-discriminatory open access to its transmission or distribution system…for use by any licensee or eligible consumer,” reads the regulations in part.
EPRA’s Role in Electricity Market structure
EPRA is mandated to issue guidelines on the electricity market structure and transition arrangements in Kenya.
According to the Regulations, the electricity market will consist of a wholesale market and a retail market.
In the new regulations, EPRA will appoint an operator for the wholesale market which involves trading between generators and retailers.
Also Read: Ndidi Nyoro Acquires New 20 Million Shares After Selling KPLC Stake
Regulations on Bulk Supply
The Regulations also prescribe the norms for bulk supply of electricity between the license electricity distributors.
This includes minimum requirements to be indicated by applicants.
“No consumer shall access bulk energy for resale. A consumer accessing bulk supply and who wishes to resell shall apply for a retail license.”
Additionally, the regulations outline the roles of various electricity market players like generators, transmitters, and distributors.
The Regulations 2024 also point to provisions like feed-in-tariffs that can encourage renewable energy.
