The Energy and Extractives sector board held a meeting on 2nd February 2018 at KEPSA Offices and the main agenda of the meeting was to look at the priority issues in the 2018 engagement agenda. The Chair, Eng. James Mwangi in his opening remarks noted the key issue affecting the ease of doing business is the cost of power. He said there is need to rethink our engagement strategy in order to ensure there’s progress in the sector.
Some of the key issues discussed include:
Time of Use Tariff
Members said there is need for clarity on the initiative for the companies that are already at 100% production capacity which in effect are not benefitting from the initiative as only those taking additional load within the prescribed time period are eligible. The Energy Regulatory Commission’s (ERC) position has been the need to spur and grow the demand during low peak hours at night. This raised a concern among members in that the actual intent of the initiative would be lost.
In addition, members agreed and said there is need for government to be clear on its position on power growth plans. Tariff transparency as well as the technical considerations on running the system are critical. It was noted that ERC is working on a loss reduction plan and the transmission projects currently going on will greatly improve dispatch once finalized.
It was also noted that there were errors identified in billing when KPLC was moving from one platform to the next and since the fuel cost charge (FCC) had been maintained below the actual level, money owed by consumers to the producers needs to be recovered. In this view, KEPSA needs to address the fundamental issue of reviewing the tariff in totality. For instance, keeping the FCC at a constant level to ensure there is reduced cost of power to the consumer without jeopardizing payment to power producers.
- Pending Legislation; Energy Bill and Petroleum Bill
Members were informed that the two Bills have already been published. During the last Ministerial Stakeholders Forum, the Cabinet Secretary mentioned that the Ministry is working towards fast tracking the passing of the two critical bills that will unlock key issues within the sector. Members agreed that it was crucial to have an engagement with the parliamentary committee on Energy early in the year with a proposal in order to apprise them of KEPSA and to get early buy in.
- Identification of institutions to engage in 2018
The idea to have deeper detailed discussions on issues closer down with the Agencies had been noted as a useful way to address the sector issues. Regular engagement is key and members identified NOC, KenGen and Vision 2030 as some of the key institutions to be invited.
Within the engagement with counties, the sector board had engaged the CECs at the induction and it was agreed that KEPSA will assist the CECs in the Energy portfolio in policy formulation.