Kenya Power faces pressure from CoG and Senators over wayleave payments

Tensions between the Council of Governors (CoG) and the Senate have reached new heights over the issue of Kenya Power’s exemption from paying for wayleave charges.

Governors, led by Nairobi's Johnson Sakaja, have vowed to pursue legal action to repeal the current law, which shields Kenya Power from these payments.

At the same time, senators have joined the push to amend the Energy Act of 2019, aiming to compel the utility company to pay for power line wayleave fees, a move they argue is essential to support counties’ revenue collection efforts.

A wayleave refers to the legal right of power companies to build infrastructure, such as power lines or fiber optic cables, across private or public land.

While these wayleaves are a potential source of revenue for counties, the current law allows Kenya Power to avoid making any payments for their use, much to the frustration of governors.

"At the Council of Governors level, we are going to challenge the provisions of the Act," Sakaja said, highlighting the growing dissatisfaction among county leaders over their inability to collect fees from this crucial resource.

The Energy Act of 2019 has become a central point of contention. Under the current framework, Kenya Power is shielded from paying wayleave charges.

Governors have argued that the law’s retroactive application is unfair, especially as the utility continues to profit from its infrastructure.

"Kenya Power is collecting millions of shillings from internet service providers who are laying their fiber optic cables. That money should go to counties, but KPLC is taking it," Sakaja emphasized.

He also pointed out that Kenya Power recently secured a Sh400 million deal with Safaricom, further underlining the company’s commercial gains from its infrastructure.

Meanwhile, Senators have taken a more proactive stance, agreeing to amend the law to make it mandatory for Kenya Power to pay for wayleave charges.

Nairobi Senator Edwin Sifuna, who is leading the legislative charge, voiced the concerns of many in the Senate.

"We agreed as the Senate that we are going to amend the law. We are urging the counties to improve, but the national government is working against that. We cannot allow the national government to deny the counties revenue," he said.

The dispute has only intensified in recent months, particularly with the ongoing conflict between Nairobi County and Kenya Power over unpaid debts and wayleave charges.

While Kenya Power has demanded Sh1.5 billion from City Hall for unpaid electricity bills, the county government is seeking Sh4.7 billion from the company for its overdue wayleave payments.

This standoff highlights the financial strain that the lack of wayleave payments places on counties and their ability to fund essential services.

Section 223 of the Energy Act prohibits public bodies from charging levies on energy infrastructure without the approval of the Cabinet Secretary.

However, governors contend that this provision, which was introduced in 2019, should not be applied retroactively.

They argue that Kenya Power has already been benefiting commercially from these wayleaves and that such payments should be redirected to local governments.

Kenya Power, on the other hand, has warned that forcing them to pay for wayleaves could lead to a sharp increase in electricity costs.

Managing Director Joseph Siror cautioned that the added financial burden of wayleave charges could drive up national energy prices by up to 30%, translating to an additional Sh63.8 billion annually.

"While the stronger shilling has reduced costs related to foreign exchange and fuel, the proposed wayleave charges could reverse recent electricity price declines," Siror explained.