KARA APRIL-MAY ISSUE.indd - The Kenya Alliance of Resident ...

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ENERGY High Power Bills: KPLC’s excuses and the pain of ERC silence Kenya Power and Lighting Company (KPLC) recent paid up media advertisements failed the test of real explanation of the current public outcry on why electricity prices have hit the skies. By attempting to do what the tight-lipped Energy Regulatory Commission (ERC) has failed to do or should have done, the KPLC statement literally said nothing of why the power bills are increasingly unbearable while the company attempts to justify its “reasonable” profi ts. Clearly sleeping on the job, the ERC established under the Energy Act 2006, is, among other responsibilities, expected to protect the interests of consumers. It is also expected to monitor, ensure implementation of, and the observance of the principles of fair competition in the energy sector, which aspects the ERC has “posted” dismal performance returns. As if to step into the vacuum created by the ERC silence, KPLC’s (now with Mr. Eliazar Ochieng Ochola as its new board chairman) intervention ended up mixing and avoiding direct answers on certain issues at hand. Unfortunate as it were, KPLC ended up in irrelevancies. Economizing of power use, for instance, is a personal decision of each consumer. It is different from the level of price per unit kilowatt, which issue should have been exhaustively dealt in the statement. It was not. While public sensitization is critical and welcome, the offer of two or three “energy saving” bulbs per household which is diffi cult to track on exactly whom has benefi ted, where and when is hardly enough. Being a public company, Kenyans expected to be told who is supplying the bulbs, how they will account for them and when the tender was advertised and awarded but this information has remained largely mysterious. In its statement, KPLC spoke as if it were the meteorological department: “it is anticipated that the coming long rains will enable …” The certainty that “long rains” are actually “coming” is baffl ing unless the agency meant “long rains season”, which according to past precedents should have been underway. The “clarifi cation on the fuel cost charge in power bills” statement loaded with minimal or no facts was reduced to re-stating the roles of other agencies and promising what is completely beyond its mandate. What was perhaps more eye-catching is this statement “with an asset base of KSh70B (US$0.9B), a profi t of about 10 to 12 percent of the asset base is reasonable to enable it meet its obligations to maintain and upgrade the countrywide electricity network which has suffered under investment …” How KPLC understands “reasonable” profi t is obviously worlds apart with the position of majority of its customers who view it to the contrary - as unreasonable, no matter the reason for profi ts. As private limited liability company with the Kenya government as a non-controlling shareholder, the fact that the KPLC enjoys a parastatal and monopoly status is self defeating – especially when the major motive behind the uncalled for profi ts appears to be to “generate a return for (its) shareholders”. The desperate attempt by KPLC to justify any profi ts, therefore, is irrational as is unconvincing of the timing and the circumstances behind the persistent public complaints. Infl uential individuals in government having dual interests as public agents and private shareholders of KPLC are hurting the public interest aspect. They are an impediment to possibility of lower fuel cost charge and heavy cushioning of independent power producers against the foreign currency fl uctuations. If indeed the Kenya government was genuine in affording Kenyans cheaper electricity, it could have long had a fair representation on the ERC board; resolved the”Triton Scandal”; considered lowering its taxation levels on oil and signifi cantly cut back its shareholding in KPLC. After reducing its shareholding in KPLC by say 50% of its share, the government would immediately have re-invested in a possible competitor to strangle the current KPLC monopoly. This would have encouraged the missing competitiveness within the sector. KPLC owns and operates the national transmission and distribution grid, and retails electricity to an estimated 1.2M customers. 24.
through kara lens A B C D E F A.. Kara CEO Mr. Stephen Mutoro (C) chats with the Alliance Chairman Andrew Enniskillen and South African businessman Mr. Moeletsi Mbeki(L) B. Kisumu and Nairobi Resident Association leaders during an exchange study visit C. Mr. John Odhiambo, Chairman, Buruburu Residents Association familiarizes Kisumu Residents with Buruburu Estate D. Participants at a Kara forum E. Kara Treasurer Mr. Ephraim Kanake and Prof. P.L.O Lumumba F. Distinguished scholar Prof. Rok Ajulu at a Kara BTS-18 25.
Page 1: MAR/APRIL 2010 10TH EDITION The Aut
Page 4 and 5: COVER STORY “Whatever the laws, w
Page 6 and 7: PERSPECTIVE Swiss envoy Georges Mar
Page 8 and 9: Appeal for support on revocation of
Page 10 and 11: ENERGY The tragedy and irony of KPL
Page 12 and 13: profile Rosemary Mkok - aroun “I
Page 14 and 15: WATER Dying Lake Naivasha - Governm
Page 16 and 17: ENVIRONMENT Oasis Lodge Owner to en
Page 18 and 19: ENTERTAINMENT Right of Reply - DStv
Page 20 and 21: NOTICE BOARD 31 st March 2010 Kara
Page 22 and 23: support Why Kenyans must support ho
Page 26: news Kara CEO joins KIM Internation

KARA APRIL-MAY ISSUE.indd - The Kenya Alliance of Resident ...

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