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Electricity Tariff Study, Kenya

When:                  July to December 2006

Client:                   Fichtner GmbH & Co. KG, Stuttgart, Germany

Ultimate clients:     World Bank
                             Electricity Regulatory Board (ERB), Kenya

The specific broad objectives of this study were to: i) develop an appropriate transmission pricing model and revenue requirements for the proposed Kenyan Transco together with an appropriate wheeling tariff; ii) review the revenue requirements of the unbundled distribution company and recommend new retail customer tariffs; and iii) determine the revenue requirements of the main generation company and recommend a new bulk tariff structure.

I was engaged mainly as the cost of service specialist, responsible for the derivation of the long run marginal cost (LRMC) of supply in Kenya, as well as the short run marginal cost, which were then used as inputs to the formulation of retail tariffs. I also provided input to other members of the study team on tariff and financial issues particular to the study.