Transcript The Need for Consumer Participation in the Reforms Process of the

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Susanne Rabisch,
CUTS Nairobi
PROJECT BACKGROUND:
KENYA
THE NEED FOR CONSUMER PARTICIPATION
IN THE REFORMS PROCESS OF THE
ELECTRICTY SUB-SECTOR
+ Introduction
A snapshot of the Kenyan Electricity Sub-sector
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15% of the Kenyan population are connected to electricity
and a mere 1% of the rural population had access to
electricity (Karekezi&Kimani 2004)
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The Rural Electrification Programme: increase in
connections from 251,056 customers in June 2010 to 309,287
as in June 2011 23.2% growth rate (KNBS 2012)
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Installed capacity expanded by 8.6 per cent to 1,534.3 MW in
2011, while the total electricity generation rose by 8.4 per
cent to 7,559.9 GWh in 2011
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Total electricity consumption showed growth rate of 9%
from 5,754.7 GWh in 2010 to 6,273.6 GWh in 2011 (KNBS
2012)
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Objectives of Kenyan Energy Policy
Ministry of Energy (2012)
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“The overall objective of the energy policy is to ensure
affordable, sustainable and reliable supply to meet national
and county development needs, while protecting and
conserving the environment”.
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Policy objectives that aim at consumer protection and
participation in the energy sector:
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“ the protection of consumer interests”
“ the promotion of diversification of energy supply sources to
ensure supply security”
“ the promotion of healthy competition in the sector ”
“ the improved access to quality, reliable and affordable energy
services ”
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Brief Overview of Electricity subsector Reforms in Kenya
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Partial unbundling: electricity generation from electricity
distribution and transmission (Kenya Power)
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Entry of private entities in electricity generation
(Independent Power Producers IPPs) in addition to
KenGen
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Government-owned institution established to develop new
electricity transmission infrastructure (KETRACO)
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Establishment of the Energy Regulatory Commission in
2007 (on basis of The Energy Act 2006)
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Establishment of the Rural Electrification Authority with a
mandate to extend electrification to remote areas
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The Impact of Electricity Regulation
Investment Climate/Competitiveness - Economy
Cost/Reliability of Production - Private Sector
Cost of Living - Household Consumers
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The need and avenues
for consumer
participation in
regulatory decision
making in the electricity
sector
+ The Need for Consumer Participation in
Regulatory Reforms of the Electricity Sector
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Legal and policy mandate to facilitate consumer
participation in regulatory reforms and consumer protection
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Role of regulators: primary mandate to ensure consumer
welfare (large scale industrial and small scale HH and
MSMEs consumers)
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Consumers’ interest should be heard because consumer are
ultimately impacted by regulation (eg. electricity tariffs):
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Household consumer’s cost of living/quality of life
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Private sector cost of production- multiplier effect
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Investment climate for foreign investment – wider economic
impact
+ The Need for Consumer Participation in
Regulatory Reforms of the Electricity Sector
Cont.
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The voices least represented are individual grassroots
consumers, private sector and other government agencies
are better placed to influence the regulatory process
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Civil society to act as a watchdog that ensures the voice of
household consumers to be heard: CSOs to facilitate two way
communication between regulators and average consumers
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Communicate consumer concerns and recommendations to
regulators
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Communicate reform process (redress and complaints
mechanisms, tariff setting procedures etc.) to consumers
+ Avenues for Consumer Participation in
Regulatory Reforms in the Electricity sector
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Written comments to regulators and policy makers
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Consumer Representatives/CSOs to engage in
dialog with regulators
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Public hearings (with average consumers)
Through Consumer Advocates (partnership
between regulators and consumer representatives)
+ Role of Consumers in Regulatory decisionmaking in the electricity sector in Kenya
Opportunities
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Enabling legislation consumer
participation in regulation
and consumer protection in
Kenya:
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Electric Power Act 1997
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The Energy Act, 2006 (ERC)
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Competition Act, 2010 (CAK)
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Consumer Protection Act,
2012
Challenges
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No clear
understanding/awareness of
enabling legislation
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Lack of consumer awareness on
avenues for consumer
participation in electricity
reforms
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Missing link between consumer
groups and civil society
organizations to engage with
regulators and policy makers
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Need for clearly defined
engagement strategy
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The Consumer Protection Act, 2012
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Partnership Model of
consumer participation in
regulatory decision making
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Legal basis for a consumer
representatives on the board
of all regulatory bodies in Kenya
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Including the Energy Regulatory
Commission and the
Competition Authority of Kenya
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Effective, timely
operationalization should
greatly increase consumer voice
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CONSUMER CONCERNS IN
ELECTRICITY IN KENYA
As found in the CUTS Study:
“State of the Kenyan Consumer” 2012
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Consumer Concerns in Electricity
in Kenya
(Asher & Sengupta 2012)
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Consumer experience when
seeking redress in Kenya
(Asher & Sengupta 2012)
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Consumer groups and CSOs require
capacity building in order to be able to
engage in the regulatory reform
process of the electricity sector
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CSOs would benefit from networking
opportunities in which they can engage
with policy makers and regulators to
voice their concerns
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Consumer-oriented regulation and
policy making in the electricity sector
has a profound effect on the livelihoods
of household consumers, MSMEs and
the Kenyan economy
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There is a clear legal mandate for
consumer protection and participation
in regulatory decision making, which
needs to be operationalized effectively
Conclusions