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{
"id": 189738,
"url": "https://info.mzalendo.com/api/v0.1/hansard/entries/189738/?format=api",
"text_counter": 17,
"type": "speech",
"speaker_name": "Mr. M.M. Mahamud",
"speaker_title": "The Assistant Minister for Energy",
"speaker": {
"id": 373,
"legal_name": "Mohammed Maalim Mahamud",
"slug": "mohammed-mahamud"
},
"content": " Mr. Speaker, Sir, I beg to reply. (a) The Energy Regulatory Commission (ERC), established under the Energy Act, 2006, in raising electricity tariffs by 21 per cent took cognisance of the following factors:- (i) Since 1999 when the last electricity tariff increase was effected, several power industry costs drivers had changed. Electricity purchase costs borne by the Kenya Power and Lighting Company (KPLC) had continuously increased on account of rising inflation. Since KPLC could not cover such increased costs induced by high inflation through the electricity tariffs, its revenues had continued to be eroded to the extent that by June, 2003, the company was technically insolvent. The Government had, therefore, to step in to restructure its balance sheet and provide the critically needed liquidity by reducing KenGen's electricity sales price to KPLC by Kshs0.60 per killowatt hour. This arrangement, even though inadequate, remained in force until 30th June, 2008. However, due to its sharp adverse effects, it was discontinued with effect from 1st July, 2008. July 10, 2008 PARLIAMENTARY DEBATES 1749 (ii) Power purchase costs from new and upcoming power generation projects as well as the operation and maintenance cost for the growing transmission and distribution infrastructure have resulted in increased revenue requirements for the electricity sector. Without a tariff increase, it would have been virtually impossible to expand the generation capacity, upgrade the power distribution system to sharply reduce blackouts and maintain and operate the power supply system. (b) To develop alternative energy, the following plan is currently under implementation. (i) Commissioning of a 35-megawatt of geothermal power plant by November, 2008, by Orpower, an IPP. (ii) Commissioning of a 26-megawatt cane fibre (bagasse) fired power plant by Mumias Sugar Company by January, 2009. (iii) Thirty five megawatt Orpower Geothermal, (IPP), by October, 2008. This is the one at the Sagana Bridge. (iv) Ten-megawatt redevelopment of Tana Power Station by July, 2009. (v) Thirty five-megawatt Olkaria II Third Unit geothermal by July, 2010. (vi) Twenty-megawatt Sang'oro Hydro Power by December, 2010. This is near Sondu Miriu. (vii) Five-megawatt Ngong Hills Wind Project by May, 2010. (viii) Twenty-megawatt Kindaruma Third Unit by December, 2010. (ix) One hundred and forty megawatt Olkaria IV by July, 2012. (c) I am not aware that development of oil refineries by Kenya's neighbours will result in loss of revenue by the Kenya Government since our neighbouring countries import all their requirements from the Persian Gulf. Kenya hardly exports any petroleum fuel to these countries because our refinery is not competitive. I am, however, aware that Uganda has made hydrocarbon discoveries around Lake Albert. Nevertheless, the Ugandan Government, in the short-term, intends to develop a small refinery with a processing capacity of 4,000 barrels per day. These quantities are not adequate to meet Uganda's requirements and, therefore, the country will continue to import shortfalls through Kenya."
}