The country's push to rescue its struggling power sector has taken an ironic twist as lawmakers want to embed nearly KSh 30 billion in rural electrification debt into the consumer base tariff.
- •The proposal, directed at the Energy and Petroleum Regulatory Authority (EPRA), would create a permanent “recovery mechanism” that spreads the cost of government arrears across all households and businesses connected to the national grid.
- •The plan is emerging at a moment when Kenyans are already contending with rising electricity charges driven by elevated fuel-cost adjustments, forex losses, and a packed schedule of statutory levies.
- •Folding historical rural electrification costs into the tariff would treat state debt to Kenya Power as a shared liability.
Lawmakers argue that the move is necessary to stabilize the utility company that's now weighed down by receivables linked to grid expansion projects long financed through the Treasury. Kenyan households already shoulder a 5% Rural Electrification Programme levy as part of their power bills.
Kenya Power’s balance sheet reflects years of delayed reimbursements, leaving it dependent on revenue streams that fluctuate with global energy markets and currency volatility. The debt owed to Kenya Power has swollen from KSh9.2 billion in 2008 to KSh 30 billion by mid-2024 and has left dozens of mini-grids crippled by failed batteries and non-functional infrastructure.
By converting arrears into a regulated tariff component, Parliament aims to guarantee predictable cash flows and reinforce the company’s ability to maintain and expand the network. The measure would provide Kenya Power relief in the near term but could intensify public frustration as bills continue to climb. A sustained increase in tariffs risks driving more households toward non-payment or off-grid alternatives, undermining the utility’s long-term revenue base.
On the other hand, lawmakers are intensifying pressure on independent power producers (IPPs), demanding full disclosure of their ownership and capping future tariffs as part of a campaign to rein in the costs they blame for bloated electricity bills.
Yet parliament is now endorsing the shifting of billions in rural electrification arrears directly onto consumers, a move that could raise bills more predictably than any power purchase agreement ever has.
The juxtaposition underscores a widening gap between political rhetoric about cutting power costs and the policy choices that transfer state obligations onto households. This dual-track approach reflects the deeper contradiction at the heart of Kenya’s power reforms: Parliament wants to signal toughness toward private generators while maintaining a political aversion to funding public sector arrears.
In a report by the parliamentary energy committee, lawmakers are also pressing to redirect non-commercial grid-extension and off-grid projects to the Rural Electrification and Renewable Energy Corporation, allowing Kenya Power to focus on revenue-generating operations.
