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Kenya asks regulator to consider pricing strategy

19 March 2008 – Kenya Electricity Generating Company (KenGen) and Kenya Power and Lighting Company (KPLC) are asking the Energy Regulatory Commission to come up with a plan to protect consumers from the frequent price increases. They have called for interventions to guarantee stable, predictable and firm market prices.


Eddy Njoroge, KenGen
managing director

Says Eddy Njoroge, KenGen managing director, "ERC should come up with incentives for the utilities whenever they go into activities that reduce the cost of foreign exchange fluctuations and fuel costs." He has requested the commission establish a pricing scheme to cushion utilities from rising fuel costs and currency exchange fluctuations.

"There are risks and costs in hedging and I am not sure whether the boards of KPLC and KenGen are ready to pick the attendant costs," said Don Priestman, KPLC chief executive.

Dr Moses Ikiara, executive director of the Kenya Institute of public policy and research, stressed the need for a stable tariff structure. "This is necessary as it is expected the 2030 Vision, which seeks to propel Kenya towards a fast growing and diversified economy, will need a competitive energy pricing environment," he said.