Govt says ‘no’ to power tariff increase

May 10, 2013
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Deputy President William Ruto told a meeting attended by officials from the Ministry of Energy, Kenya Power, the Energy Regulatory Commission (ERC) and the Treasury that the government will not allow such an increases/DPPS
Deputy President William Ruto told a meeting attended by officials from the Ministry of Energy, Kenya Power, the Energy Regulatory Commission (ERC) and the Treasury that the government will not allow such an increases/DPPS
NAIROBI, Kenya, May 10 – The government has rejected proposals by electricity distribution company Kenya Power to raise tariffs, and has instead directed the utility firm to seek other means of raising revenue.

Deputy President William Ruto told a meeting attended by officials from the Ministry of Energy, Kenya Power, the Energy Regulatory Commission (ERC) and the Treasury that the government will not allow such an increases.

“KPLC (Kenya Power) has to sort out any inefficiency in its operations…the government will not accept any proposal to increase power tariffs; it is a burden to the country,” Ruto said in his office.

“There is no justification for these (tariff) increases. Tariff reviews cannot just be upwards; let us review it downwards,” he added.

The deputy president said manufacturers and ordinary power consumers had suffered higher tariffs when Kenya Power and its affiliates could find cheaper ways of generating and distributing electricity.

“You have to work out a plan for enhancing an efficient, cheap and effective power supply to Kenyans. This must be done urgently,” he maintained.

Energy Permanent Secretary Patrick Nyoike, ERC Director General Kaburu Mwirichia, KPLC Managing Director Joseph Njoroge, Investment Secretary Esther Koimett and Kamau Thuge, senior economic advisor at the Treasury attended the meeting.

Kenya Power had planned a major tariff hike from March to meet the cost of commissioning 1,250Megawatt power projects by 2015.

In February this year the national power supplier sent the electricity review proposal to the ERC on grounds that the existing tariffs were not sustainable in view of an ambitious capacity expansion and operating costs.

But the deputy president told those responsible for production and distribution of electricity to find ways of reducing the cost of power by diversifying generation.

He noted that the tariffs were an impediment to development and had made some investors look elsewhere to set up shop.

The private sector had also petitioned the government over the tariffs complaining that it would increase the cost of production and reduce profit margins for businesses.

He has asked the officials to develop a medium term power plan for the next two years so that geothermal generation can be exploited to the maximum further bring down the costs.

“Your Ministry needs to do more to exploit cheaper sources of power…we as a Government are very clear that we are not going the direction of increasing prices.” Ruto told PS Nyoike.

He said the old mode of power generation was costly and inefficient.

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