The Ministry of Energy through a Gazette Notice dated March 2, 2024, announced a plan to hand out licences to electricity retailers.
The move detailed under the Energy (Electricity Market, Bulk Supply and Open Access) Regulations, 2024, will see more Independent Power Producers (IPPs) take a position that was predominantly reserved for Kenya Power.
Explaining the move, the Energy Ministry noted that the regulations were drafted to govern the generation, importation, exportation, transmission and distribution and retail supply of electrical energy.
A company or a person licensed to retail electricity will supply consumers with power provided that the said consumer has no existing contract for the supply of electrical energy with any other licensee.
“A consumer shall choose his retail supplier provided that the said consumer shall not have two supply contracts for the same premises,” the regulations explain the process.
Additionally, in transforming the sector, the Gazette Notice explained that the electricity market should consist of a wholesale market and a retail market.
“The wholesale market shall comprise of generation licensees and other licensees who will trade through the intermediary of an operator, who shall be designated by the Authority,” it was explained.
On operations, the retail market will be purchasing from the wholesale market and supply to consumers.
IPPs who will get a licence to retail electricity will get permission to supply in one or more distinct geographical areas or particular premises.
The Energy and Petroleum Regulatory Authority (EPRA) will have the power to set prices of the electricity being retailed.
This will ensure that the IPPs do not exploit Kenyans by charging exorbitant token prices.
EPRA will further decide on how much the electricity retailers will pay the Kenya Electricity Transmission Company Limited (KETRACO) to use existing infrastructure to supply electricity through the main grid.
The licensees will also pay some amount to Kenya Power to use its system charges with the amount to be paid also decided by EPRA.
