CS Juma Assures Energy Ministry Reforms Will Be Done Within The Law With Strict Deadlines

CS Juma Assures Energy Ministry Reforms Will Be Done Within The Law With Strict Deadlines

BY KORIR JUMA,NAIROBI,25TH OCT 2021 – Energy Cabinet Secretary Monica Juma has assured that the ongoing reforms in the ministry which are geared towards lowering the cost of power will be done strictly within the law.

Juma said the ministry is guided by a report of a presidential taskforce that handed its report to the President Uhuru Kenyatta last month with recommendation to cut power costs in the country by at least 33 per cent by December.

To achieve this the taskforce recommended a raft of measures, among them the review of Power Purchase Agreements (PPAs) signed with Kenya Power.

At a meeting with Editors on Monday, Juma said her ministry has initiated talks with the IPPss to renegotiate or terminate existing contracts.

“It is important to note that the negotiations and/or termination will be undertaken within the stipulations of the respective contracts, adhering to contractual obligations and provisions, certainly, within the confines of the law but most importantly, responding to the national interests of this nation,” Juma told Editors in the consultative meeting.

In the ongoing talks, Juma called for goodwill from the stakeholders.

“There is no contestation on the objective of generation of low-cost energy and distributing it to the consumers. I have welcomed IPPs and urged them to approach this conversation from a goodwill stand of point. I am hopeful because I am seeing positive indications,” she said.

The reforms, she said, will be instituted within a specific plan and timelines  due to the mounting  pressure to put in place changes in the Energy sector.

“We are careful not to institute measures that will negatively impact the quantum or quality of energy in this country. There is a great responsibility in working out the different pathways to deliver the intended outcome for the recommendations,” Juma stated.

The Ministry also froze all pending and ongoing contracts with independent power producers as the utility firm reviews the existing agreements to lower the cost of electricity in the country.

This is after it emerged that that IPPs accounted for 47% of power procurement costs in FY2020, but only 25% of power volumes, whilst KenGen accounted for 48% of costs and 72% of volumes.

This raised questions on the amount of tariffs paid to IPPs in consideration with the appropriateness of the capacity that was procured and nature of the contractual terms.

“Whereas the Government of Kenya appreciates the emergence of IPPs as key elements in the power sector value chain we cannot ignore the reality of the serious challenges that abound in the power sector,” she said.

Juma further pointed out that the recommendations of the Presidential Taskforce will not be achieved without the right-fitting of KPLC’s organizational and operational structures.

“We are looking into another range of activities including the reorganization of KPLC and the energy sector so as we have synergy and better alignment and better optimization in every of their aspects,”Juma stated.

 

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