KENYA Law and Practice Contributed by: Mary Waithiegeni Chege, Mary Anne Wachira and Joy Odhiambo, EMSI & Associates
5.4 Eminent Domain, Condemnation or Expropriation Rights to Construct and Operate Electricity Distribution Facilities The provisions relating to transmission facilities are applicable to distribution facilities (see 4.4 Eminent Domain, Condemnation and Expropri- ation Rights to Construct and Operate Trans- mission Lines and Associated Facilities ). 5.5 Monopoly Rights for Electricity Distribution Entities Like transmission licensees, a distribution licen- see has exclusive monopoly rights to provide distribution services within a specified geo- graphical territory, subject to the rights of eligi- ble consumers who are entitled to choose any licensee to be their supplier of electrical energy for their own use upon the payment of use of system charges. The Energy (Electricity Mar- ket, Bulk Supply and Open Access) Regulations provide that, for grant of open access, the load shall not be less than 1 MVA in the distribution system. The Energy Act contemplates that the distribu- tion system within a licensee’s licensed area may consist of the electric supply lines planned and built by REREC or the relevant county govern- ment, in addition to those planned and built by the licensee. The Energy (Net Metering) Regulations, 2024 provide a framework for consumers generating power using renewable energy technologies with an installed capacity of less than 1 MW to supply electricity to the grid in times of over-production and to make use of the credited energy during other times.
5.6 Electricity Distribution System Charges and Terms of Service The process for establishing distribution system charges and terms of service are similar to those applicable to the transmission sector (see 4.6 Transmission Charges and Terms of Service ). With specific reference to the quality of supply and service, the Energy (Reliability and Quality of Electrical Energy Supply and Service) Regu- lations require a distribution licensee to distrib- ute electrical energy in a reliable manner that promotes quality, and to submit a reliability and quality of supply indicator report and a quality of service indicator report to EPRA at least once in each month and at the end of the financial year. The Kenya National Distribution Grid Code sets outs the framework for the planning, develop- ment, connection, operation, maintenance and performance standards for the distribution sys- tem. The Energy Act requires that Contracts for Bulk Supply and Electricity Supply Contracts for Retailers shall include tariffs to be approved by EPRA, which ensures that the rates or tariffs are just and reasonable. Use of system charges applicable to other licensees and eligible con- sumers for non-discriminatory open access to a distribution network are also expected to be just and reasonable. A just and reasonable tariff is defined as one that enables the licensee to maintain its financial integrity, attract capital, operate efficiently and compensate investors for the risks assumed. The Guidelines on Return on Equity and Return on Investment published by EPRA in November 2021 are also applicable to distribution projects within the country and would have an impact on the final tariffs proposed by distribution com- panies.
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