KENYA Law and Practice Contributed by: Mary Waithiegeni Chege, Mary Anne Wachira and Joy Odhiambo, EMSI & Associates
Computation of Allowed Return on Equity and Return on Investment for generation, transmis- sion and distribution projects within the country, which should be considered when setting tariffs for transmission charges. Furthermore, Kenya’s Power Market Study notes that a key principle to be used in developing the wheeling tariffs is that network costs should be estimated by volt- age level. With specific reference to the quality of supply and service, the Energy Act requires a licensee to collect, analyse and maintain such data as is necessary to enable the licensee to monitor and report to EPRA on the reliability and quality of supply and service. The Kenya National Trans- mission Grid Code sets out rules and technical standards for connection to and use of the grid in a manner that will ensure reliable, efficient and safe operation. The Energy Act defines “open access” as non- discriminatory provision for the use of an elec- tric transmission or distribution system by any licensee or consumer. The Act also provides that a transmission licensee has the duty to provide non-discriminatory open access to its transmis- sion system for use by any licensee or eligible consumer upon the payment of fair and reason- able transmission or wheeling charges, as shall be prescribed in regulations made under the Act. Open access in the transmission segment is regulated under Section 136 of the Energy Act and is subject to the payment of transmission or wheeling charges, which are set or approved by EPRA. Subject to the payment of the transmis- sion or wheeling charges, users of a transmission service have the right to access a transmission system that is operated with enough capacity to 4.7 Open-Access and Non- Discriminatory Transmission
provide network services and that is operated, maintained and protected by the transmission licensee to ensure the adequate, economic, reli- able and safe transmission of electricity. The Energy Act establishes the role of a System Operator, which is responsible for matching con- sumer requirements or demand with electrical availability or supply, maintaining electric power system security and arranging for the dispatch process. Kenya Power has historically been cen- tral to the electricity demand planning process and also served as the System Operator until KETRACO’s designation in January 2022; the transfer of this function is presently underway. The designation of KETRACO as the System Operator is in line with the provisions of Sec- tion 138 (9) of the Energy Act, which requires the System Operator not to be involved in the direct or indirect buying or selling of electrical energy, which is Kenya Power’s core business. Finally, the Energy Act requires the transmission licensee to operate, maintain (including repair and replace if necessary) and protect its trans- mission grid to ensure the adequate, economic, reliable and safe transmission of electricity.
5. Distribution 5.1 Constructing and Operating Electricity Distribution Facilities
All the laws governing the construction and operation of electricity generation and trans- mission segments apply to distribution, together with the Kenya National Distribution Grid Code.
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