Will Kenya Power's New Deal Raise Bills? Muhoroni Gas Plant's High Tariff Sparks Debate

Kenya Power is planning to renew its power purchase agreement (PPA) with the Muhoroni Gas Turbine, which is owned by KenGen, at a rate of Ksh 56.73 per kilowatt-hour. This PPA extension, initially set for one year, aims to stabilize electricity supply in western Kenya, where power stability has been a significant issue. The renewal talks are currently under review by the Energy and Petroleum Regulatory Authority (EPRA), which will determine the final tariff terms for the extension.

The Muhoroni Gas Turbine plant plays a crucial role as a backup generator, particularly during periods of power shortfalls or transmission interruptions, ensuring that areas in western Kenya receive an uninterrupted power supply. However, this PPA’s high cost has sparked concern. The Ksh 56.73 rate per unit is significantly higher than other sources, which may lead to increased operational costs for Kenya Power and, ultimately, higher energy prices for consumers if costs are passed on.

The renewal discussion reflects Kenya Power's efforts to address energy reliability issues in remote areas, but it also emphasizes the country's challenge of balancing energy costs with infrastructure needs. If approved, the agreement is expected to bridge current power gaps but may renew calls for Kenya to diversify its energy sources to reduce reliance on expensive thermal power solutions in the future.

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