Point in Time
Act No: No. 12 of 2006
Act Title: ENERGY
[ Date of commencement: 7th July, 2007. ]
[ Date of assent: 30th December, 2006. ]
Arrangement of Sections
PART I – PRELIMINARY
1.
Short title

This Act may be cited as the Energy Act.

3.
Application

The provisions of this Act shall apply, as hereinafter specified, to every person or body of persons importing, exporting, generating, transmitting, distributing, supplying or using electrical energy; importing, exporting, transporting, refining, storing and selling petroleum or petroleum products; producing, transporting, distributing and supplying of any other form of energy, and to all works or apparatus for any or all of these purposes.

PART II – ENERGY REGULATORY COMMISSION
4.
Establishment of the Commission
(1)

There is established a Commission to be known as the Energy Regulatory Commission.

(2)

The Commission shall be a body corporate with perpetual succession and a common seal and shall in its corporate name be capable of—

(a)

suing and being sued;

(b)

taking, purchasing or otherwise acquiring, holding, charging or disposing of movable and immovable property;

(c)

borrowing and lending money; and

(d)

doing or performing all other things or acts for the furtherance of the provisions of the Act which may be lawfully done or performed by a body corporate.

(3)

Except as otherwise provided in this Act, the Commission shall be independent in the performance of its functions and duties and exercise of its powers and shall not be subject to the direction or control of any person or authority.

5.
Objects and functions of the Commission

The objects and functions of the Commission shall be to—

(a)

regulate—

(i) importation, exportation, generation, transmission, distribution, supply and use of electrical energy;
(ii) importation, exportation, transportation, refining, storage and sale of petroleum and petroleum products;
(iii) production, distribution, supply and use of renewable and other forms of energy;
(b)

protect the interests of consumer, investor and other stakeholder interests;

(c)

maintain a list of accredited energy auditors as may be prescribed;

(d)

monitor, ensure implementation of, and the observance of the principles of fair competition in the energy sector, in coordination with other statutory authorities;

(e)

provide such information and statistics to the Minister as he may from time to time require; and

(f)

collect and maintain energy data;

(g)

prepare indicative national energy plan;

(h)

perform any other function that is incidental or consequential to its functions under this Act or any other written law.

6.
Powers of the Commission

The Commission shall have all powers necessary or expedient for the performance of its functions under this Act and in particular, the Commission shall have the power to—

(a)

issue, renew, modify, suspend or revoke licences and permits for all undertakings and activities in the energy sector;

(b)

make proposals to the Minister, of regulations which may be necessary or expedient for the regulation of the energy sector or for carrying out the objects and purposes of this Act;

(c)

formulate, enforce and review environmental, health, safety and quality standards for the energy sector, in coordination with other statutory authorities;

(d)

enforce and review regulations, codes and standards for the energy sector;

(e)

prescribe the form and manner in which any application for a licence or permit or amendment thereof or objection thereto shall be made and the fees payable in respect of any such application;

(f)

prescribe the form and manner in which any application for any authority, consent or approval under this Act shall be made;

(g)

prescribe the conditions which may be attached to the grant of licences or permits under this Act;

(h)

make and enforce directions to ensure compliance with conditions of licenses or permits issued under this Act;

(i)

set, review and adjust electric power tariffs and tariff structures, and investigate tariff charges, whether or not a specific application has been made for a tariff adjustment;

(j)

approve electric power purchase and network service contracts for all persons engaging in electric power undertakings;

(k)

examine and approve meters used or intended to be used for ascertaining the quantity of energy;

(l)

investigate complaints or disputes between parties with grievances over any matter required to be regulated under this Act;

(m)

prescribe the requirements for accreditation of persons with appropriate skills to check accuracy of energy meters installed in residential, commercial or industrial premises;

(n)

prescribe the manner and intervals of time within which the energy audit shall be conducted;

(o)

impose sanctions and penalties on persons who are in breach of any of the provisions of this Act or any regulations made thereunder; and

(p)

grant licences, in coordination with other statutory authorities, for sustainable charcoal production upon submission of satisfactory development plans.

7.
Protection from personal liability

No matter or thing done by a member of the Commission or any officer, employee or agent of the Commission shall, if the matter or thing is done bona fide for executing the functions, powers or duties of the Commission, render the member, officer, employee or agent or any person acting by his directions personally liable to any action, claim or demand whatsoever.

8.
Liability of Commission for damages

The provisions of this Act shall not relieve the Commission of the liability to pay compensation or damages to any person for any injury to him, his property or any of his interests caused by the exercise of any power conferred by this Act or by the failure, whether wholly or partially, of any works.

9.
The common seal of the Commission
(1)

The common seal of the Commission shall be kept in the custody of the Commission Secretary and shall not be affixed to any instrument or document except as authorised by the Commission.

(2)

All instruments or documents issued under the common seal of the Commission shall be authenticated under the hand of the Director-General or any other member of the Commission authorised by the Commission.

(3)

The common seal of the Commission, when affixed to a document and duly authenticated, shall be judicially and officially noticed and unless and until the contrary is proved, any necessary order or authorisation by the Commission under this section shall be presumed to have been duly given.

10.
Commissioners
(1)

The management of the Commission shall vest in the Commissioners of the Commission which shall consist of—

(a)

a Chairperson who shall be appointed by the President;

(b)

the Permanent Secretary in the Ministry for the time being responsible for Energy or his representative;

(c)

the Director General;

(d)

five other Commissioners appointed by the Minister to represent the private sector in general.

(2)

A person shall be qualified for appointment as a chairperson under subsection (1)(a) or commissioner under subsection (1)(d) if such person—

(a)

is a holder of a university degree recognised in Kenya in the fields of engineering, physical sciences, law, finance, economics or energy; and

(b)

has at least seven years working experience in the relevant field, five of which is at a senior management level.

(3)

The Chairperson shall hold Office for a term of four years and shall be eligible for reappointment for one further term of four years.

(4)

The commissioners appointed under subsection (1)(d) shall hold office for a term of three years and shall be eligible for re-appointment for one further term of three years.

(5)

The commissioners shall be appointed at different times so that the respective expiry dates of their terms of office shall fall at different times.

11.
Termination of appointment of commissioners

The appointment of the Chairperson or a commissioner may be terminated, on the advice of the commission, by the President in the case of the Chairperson or by the Minister in the case of a commissioner, if the Chairperson or a commissioner—

(a)

is declared bankrupt;

(b)

is convicted of a criminal offence involving dishonesty, fraud or moral turpitude;

(c)

is absent from three consecutive meetings of the commission without reasonable cause to the satisfaction of the commission in consultation with the Minister; or

(d)

in any particular case fails to comply with the provisions of paragraph 6 of the First Schedule.

12.
Appointment of the Director General
(1)

The Minister may, on the recommendation of the Commission, appoint a Director-General of the Commission who shall be the chief executive of the Commission and shall, subject to the directions of the Commission, be responsible for the day to day management of the Commission.

(2)

The Minister may appoint the Director-General mentioned in subsection (1) from a list of three names of persons submitted by the Commission provided that the Commission obtains the names through a competitive selection process.

(3)

A person shall be qualified for appointment as a Director-General if such person—

(a)

is a holder of a recognised university degree in the fields of engineering, physical science, law, finance, economics, energy or a related field; and

(b)

has at least seven years working experience in the relevant field.

(4)

The Director-General shall hold office for a term of three years and shall be eligible for re-appointment for one further term of three years.

(5)

The Director-General shall be an ex officio member of the Commission but shall have no right to vote at any meetings of the Commission.

13.
Appointment of a Commission Secretary
(1)

There shall be a Commission Secretary who shall be appointed on such terms and conditions as the Commission may determine.

(2)

A person shall be qualified for appointment as a Commission Secretary if such person holds a university degree in law recognised in Kenya and is a registered certified public secretary with at least seven years relevant experience.

(3)

The Commission Secretary shall—

(a)

be the Secretary to the Commission;

(b)

record and keep minutes and other records of the Commission;

(c)

keep custody of the seal of the Commission; and

(d)

carry out such other functions as the Commission or the Director-General may, from time to time, assign.

(4)

In the performance of his duties under this Act, the Commission Secretary shall be responsible to the Director-General.

14.
Headquarters

The headquarters of the Commission shall be in Kenya at a place gazetted by the Minister.

15.
Appointment of directors, inspectors and other employees
(1)

Subject to subsection (2), the Commission may appoint such directors, inspectors, officers or other staff for the proper discharge of the functions of the Commission under this Act, on such terms and conditions of service as the Commission may determine.

(2)

Notwithstanding subsection (1), a person shall qualify for appointment as a director if such person holds a recognized university degree in engineering, physical sciences, law, finance, economics or energy and has at least seven years relevant experience.

16.
Remuneration of Commissioners

The Commission shall, in consultation with the Minister, pay its members such remuneration, fees or allowances for expenses as it may determine from time to time.

17.
Delegation by the Commission
(1)

The Commission may, by resolution either generally or in any particular case, delegate to any committee of the Commission or to any member, officer, employee or agent of the Commission the exercise of any of the powers or the performance of any of the functions or duties of the Commission under this Act.

18.
Conduct of business and affairs of the Commission

The conduct and regulation of the business of the Commission shall be as provided in the First Schedule, but subject thereto, the Commission shall regulate its own procedure and the procedure of any committee thereof.

19.
Funds of the Commission
(1)

The funds of the Commission shall consist of—

(a)

such levies as the Minister may impose on the sales of electricity, petroleum and other energy sources;

(b)

interest from bank deposits;

(c)

revenue from other sources including loans, grants, gifts or donations approved by the Minister; and

(d)

such moneys as may, from time to time, be appropriated by Parliament for that purpose.

(2)

There shall be paid out of the funds of the Commission, all expenditure incurred by the Commission in the exercise of its powers or the performance of its functions under this Act.

20.
Financial year

The financial year of the Commission shall be the period of twelve months ending on the thirtieth June in each year.

21.
Annual estimates
(1)

At least three months before the commencement of each financial year, the Commission shall cause to be prepared estimates of the revenue and expenditure of the Commission for that year.

(2)

The annual estimates shall make provision for all the estimated expenditure of the Commission for the financial year and in particular, the estimates shall provide for—

(a)

the payment of salaries, allowances and other charges in respect of the staff of the Commission;

(b)

the payment of pensions, gratuities and other charges in respect of the staff of the commission;

(c)

the proper maintenance of the buildings and grounds of the Commission;

(d)

the maintenance, repair and replacement of the equipment and other property of the Commission.

(3)

The annual estimates shall be approved by the commission before the commencement of the financial year to which they relate and shall be submitted to the Minister for approval and after the Minister’s approval, the Commission shall not increase the annual estimates without the consent of the Minister.

22.
Books of accounts, records, audit and reports
(1)

The Commission shall keep or cause to be kept proper books of accounts recording all the income and liabilities, expenditure, assets, undertakings, funds, activities, contracts, transactions and any other business of the Commission.

(2)

The Commission shall ensure that all moneys received are properly brought to account, all payments out of its funds are correctly made and properly authorized and that adequate control is maintained over its assets and liabilities under this Act.

(3)

Within a period of three months after the end of each financial year, the Commission shall submit to the Controller and Auditor-General or to an auditor appointed under subsection (4), the accounts of the Commission together with—

(a)

a statement of income and expenditure during that year;

(b)

a balance sheet showing the assets and liabilities of the Commission as of the end of the financial year.

(4)

The accounts of the Commission shall be audited by the Controller and Auditor-General or by an auditor appointed by the Commission with the written approval of the Controller and Auditor-General.

(5)

The appointment of an auditor shall not be terminated by the Commission without the prior written consent of the Controller and Auditor-General.

(6)

The Controller and Auditor-General may give general or special directions to an auditor appointed under subsection (4) and the auditor shall comply with those directions.

(7)

An auditor appointed under subsection (4) shall report directly to the Controller and Auditor-General on any matter relating to the directions given under subsection (6).

(8)

Within a period of six months after the end of the financial year, the Controller and Auditor-General shall report on the examination and audit of the accounts of the Commission to the Commission and to the Minister, and in the case of an auditor appointed under subsection (4), the auditor shall transmit as copy of the report to the Controller and Auditor-General.

(9)

Nothing in this Act shall be construed to prohibit the Controller and Auditor-General from carrying out an inspection of the Commission’s accounts or records whenever it appears to him to be desirable and the Controller and Auditor-General shall carry out such an inspection at least once every six months.

(10)

Notwithstanding anything in this Act, the Controller and Auditor-General may transmit to the Minister a special report on any matters incidental to his powers under this Act, and the provisions of the Public Audit Act, 2003 (No.12 of 2003) on the same issue shall apply mutatis mutandis to any report made under this section.

(11)

The Minister shall lay the audit report before the National Assembly as soon as reasonably practicable after the report is submitted to him under this section.

(12)

The fee for any auditor, not being a public officer, shall be determined and paid by the Commission.

(13)

The Commission shall within three months after the close of each financial year prepare and submit to the Minister a report of its operations and activities throughout the year, in such form and detail as the Minister shall from time to time determine, and the Minister shall as soon as practicable after receiving the report cause it to be laid before the National Assembly.

24.
Powers of committees or agents
(1)

A committee or agent appointed under section 23 may, upon production of evidence of appointment to any person reasonably requiring it, for the purposes of this Act—

(a)

enter upon any premises at which any undertaking is carried out or an offence under this Act is or is suspected to have been committed;

(b)

inspect and test any process, installation, works or other operation which is or appears likely to be carried out in those premises;

(c)

be accompanied by a police officer(s) if there is a reason to believe that any serious obstruction may occur;

(d)

require from any person the production of any book, notice, record, list or other document which appears to him to have relevance to the inspection or inquiry, which is in the possession or custody or under the control of that person or of any other person on his behalf;

(e)

examine and copy any part of any book, notice, record, list or other document which appears to have relevance to the inspections or inquiry, and require any person to give an explanation of any entry therein, and take possession of any such book, notice, record, list or other document as he believes may afford evidence of an offence under this Act;

(f)

require information relevant to his inspection or inquiry from any person whom he has reasonable grounds to believe is or has been employed at any such premises or to have in his possession or custody or under his control any article referred to in this subsection; or

(g)

exercise such other powers as may be necessary in connection with the inspection or inquiry and other powers of his appointment under section 23.

(2)

A committee or agent entering any premises under this section may be accompanied by such persons and may enter with such equipment as may be necessary.

(3)

Where—

(a)

the premises to which this section relates are unoccupied; or

(b)

the owner, occupier or person in charge thereof is temporarily absent; or

(c)

entry thereon is refused or obstructed,

the committee or agent may use such force as is reasonably necessary to effect entry:

Provided that in the case of an entry under paragraph (a) or (b)—

(i) reasonable steps shall be taken prior to entry by the committee or agent to find the owner, occupier or person in charge of the premises to be entered; and
(ii) the premises shall be left by the committee or agent as effectively secured against trespassers as they were found.
(4)

A person who resists, hinders or obstructs any committee or agent acting in the course of his duty under this section or who wilfully fails to comply with any requirements lawfully made thereunder commits an offence and shall, on conviction, be liable to a fine not exceeding twenty five thousand shillings for each day or part thereof that the obstruction occurs.

25.
Decisions of the Commission
(1)

Decisions of the Commission shall be in writing and the order so given and reasons thereof shall be served upon all parties to the proceedings, and published in the Gazette.

(2)

All orders of the Commission shall become effective on the date of entry thereof, and shall be complied with within the time prescribed therein.

26.
Appeal against a decision of the Commission

A person aggrieved by a decision of the Commission may appeal to the Tribunal within thirty days of the decision:

Provided that the Tribunal may entertain an appeal after the expiry of the thirty-day period if it is satisfied that there was sufficient cause for not filing it within that period.

PART III – ELECTRICAL ENERGY
Licensing
27.
Requirements for a licence or permit
(1)

Subject to the provisions of this Act, a licence or licences as the case may be, shall be required for the—

(a)

generation, importation or exportation, transmission or distribution of electrical energy; or

(b)

supply of electrical energy to consumers:

Provided that for undertakings involving a capacity not exceeding 3,000 kW, the provisions of subsections (2), (3) and (4) shall apply.

(2)

A permit shall be required in respect of all undertakings—

(a)

intended for the supply of electrical energy to other persons or consumers; and

(b)

with a generating plant of over 1000 kW intended for own use.

(3)

Any undertaking operating pursuant to a permit granted under this Act shall—

(a)

in any case where conveyance of electrical energy to or from any transmission or distribution network is possible, meet the minimum requirements of the owner or operator of the transmission or distribution network as approved by the Commission, and the owner or operator of any such undertaking shall inform the network owner or operator of all connected load and generation equipment that might have material effect on the network; and

(b)

be subject to such conditions as may be specified by the Commission.

(4)

A permit shall not be required in the case of installations with a generating plant of a capacity not exceeding 1000 kW and connected within the premises of any person in such a manner that conveyance of electrical energy to a transmission system or a distribution system cannot occur.

(5)

A person who contravenes the provisions of this section commits an offence and shall, on conviction, be liable to—

(a)

in the case of contravention of subsection (1) a fine not exceeding two million shillings, or to a maximum term of imprisonment of two years, or to both; and

(b)

in the case of contravention of subsections (2), (3) and (4), a fine not exceeding one million shillings, or to a maximum term of imprisonment of one year, or to both.

28.
Application for a licence or permit
(1)

An application for a licence or permit, (including an application for amendment, transfer or renewal), shall be made to the Commission in the form and manner prescribed by regulations made by the Minister under this Act.

(2)

Before making any application for a licence, the intending applicant shall give fifteen days notice, by public advertisement, in at least two national and one regional newspaper of wide circulation and within the time specified for its publication of the intended application.

(3)

In addition to the notice required under subsection (2), the intending applicant shall serve a notice in writing with the particulars of the application on every local authority in the area or proposed area of supply and in any other area concerned in the application, but, where the intending applicant is a local authority and the application to be made relates to an area in the jurisdiction of the intending applicant, the provision as to notice to the local authority shall not apply.

(4)

Every notice under subsection (2) or (3) shall state that any person or body of persons desirous of making any representation on or objection to the application or to the grant of the licence shall do so by letter addressed to the Commission and marked on the outside of the cover enclosing it “Electric Power Licence Objection”, on or before the expiration of thirty days from the date of the application as stated in the notice and that a copy of such representation or objection shall be forwarded to the applicant.

(5)

The Commission shall, within fifteen days after receipt of the application, inform the applicant in writing whether the application is complete.

(6)

The Commission may hear any objections in public, at a time and place of which not less than fifteen days notice shall be given to the applicant and to every objector and the Commission shall make known its decision regarding any objection within thirty days after the hearing.

29.
Commission may invite applications for a licence or permit

The Commission may, through a fair, open and competitive process in accordance with procedures prescribed by the Minister by regulations, invite applications for a licence or permit under this Act.

30.
Factors to be considered in an application
(1)

The Commission shall, in granting or rejecting an application for a licence or permit, take into consideration—

(a)

the impact of the undertaking on the social, cultural or recreational life of the community;

(b)

the need to protect the environment and to conserve the natural resources in accordance with the Environmental Management and Co-ordination Act of 1999 (No. 8 of 1999);

(c)

land use or the location of the undertaking;

(d)

economic and financial benefits to the country or area of supply of the undertaking;

(e)

the economic and energy policies in place from time to time;

(f)

the cost of the undertaking and financing arrangements;

(g)

the ability of the applicant to operate in a manner designed to protect the health and safety of users of the service for which the licence or permit is required and other members of the public who would be affected by the undertaking;

(h)

the technical and financial capacity of the applicant to render the service for which the licence or permit is required;

(i)

any representations or objections made under subsection (4) of section 28;

(j)

the proposed tariff offered; and

(k)

any other matter that the Commission may consider likely to have a bearing on the undertaking.

(2)

The Commission shall process all applications for a licence or permit within ninety days after the Commission confirms to the applicant, in writing, that the application is complete.

(3)

The Commission shall, where it refuses to grant a licence or permit, give the applicant a statement of its reasons for the refusal within thirty days of the refusal.

31.
Form and conditions of a licence or permit
(1)

Every licence or permit shall be in such form as the Commission may determine and shall, subject to subsection (2), contain such particulars or conditions where applicable—

(a)

the provisions for tariffs or charges for the importation, exportation, generation, transmission, distribution and supply of electrical energy to different classes of consumers;

(b)

the duration of the licence or permit;

(c)

the maximum capacity of supply of the undertaking;

(d)

the area of supply of the undertaking; and

(e)

any other matter connected with the carrying on of the undertaking.

(2)

All licences or permits issued by the Commission shall include the following conditions—

(a)

a requirement that the licensee or permit holder shall comply with all applicable environmental, health and safety laws;

(b)

a stipulation that the licensee or permit holder is subject to liability under tort and the contract laws; and

(c)

a requirement that all necessary fees associated with the licence or permit shall be paid on a timely basis.

(3)

A licence or permit issued under this Act may not be altered, revised or modified, except with the consent of the holder.

32.
Licensee and a permit holder to provide access
(1)

A licensee or permit holder who is a network service provider shall provide access to all existing and potential network users of that part of the grid owned or operated by him upon—

(a)

payment of such fees and other charges for network services; and

(b)

compliance with such minimum requirements of the network service provider,

as may be approved by the Commission.

(2)

A licensee or permit holder shall provide the Commission with such information as the Commission may prescribe to enable the Commission approve the fees, charges and requirements under subsection (1).

(3)

In this section—

“network service” means a transmission service or distribution service associated with the conveyance and controlling the conveyance, of electrical energy through the network;

“network service provider” means a person who engages in the activity of owning, controlling, or operating a transmission or distribution system pursuant to a licence or permit granted under this Act;

“network user” means a person licensed under this Act to generate, transmit, distribute or supply electrical energy or a large retail consumer.

33.
Licensee or permit holder not to purchase other undertakings
(1)

A licensee or permit holder shall not purchase or acquire any undertaking or associate himself with any public or local authority, company, person or body of persons supplying electrical energy under any licence, except with the authority of the Commission.

(2)

A licensee or permit holder who contravenes the provision of subsection (1) shall be liable to the revocation of his licence or permit, in addition to such other action as the Commission may deem fit.

34.
Transfer of licence or permit
(1)

A licensee or permit holder shall not transfer or otherwise divest any rights, powers or obligations conferred or imposed upon him by the licence without the consent of the Commission.

(2)

The Commission may, on application by any of the following persons, transfer a licence or permit—

(a)

in the case of the death of the licensee or permit holder, to the legal representative of such licensee or permit holder;

(b)

in the case of the bankruptcy of the licensee or permit holder or assignment for the benefit of his creditors generally, to the lawfully appointed trustee or assignee;

(c)

in the case of a corporation in liquidation, to the lawfully appointed liquidator;

(d)

in any case where the licensee or permit holder becomes subject to a legal disability, to any person lawfully appointed to administer his affairs; or

(e)

in the case of voluntary transfer of the undertaking, to the new owner of the undertaking,

and a licence or permit so transferred shall, notwithstanding any other provision of this Act, continue to retain an expiry date similar to the one existing in the licence or permit before the transfer.

(3)

The Commission shall satisfy itself of the legal, technical and financial competence of the transferee to carry out the undertaking.

(4)

The transferee shall undertake in writing to comply with the licence or permit conditions.

(5)

The Commission shall not withhold any consent to any application to transfer unless it has reason to believe that public interest is likely to be prejudiced by the transfer.

(6)

In this section—

“transfer of licence or permit” includes the acquisition of a controlling interest directly or indirectly in the licence holder or permit holder; and

“controlling interest” as used with respect to any person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management of that person, whether through the ownership of shares, voting, securities, partnerships or other ownership interests, agreements or otherwise.

35.
Failure of licensee or permit holder to meet obligations
(1)

If a licensee or permit holder fails to meet his obligations under this Act, the Commission shall serve upon him a notice in writing to meet those obligations within fourteen days or such longer period but not exceeding sixty days as the Commission may determine.

(2)

Subject to subsection (3), if a licensee or permit holder fail to comply with the requirements of the notice, the Minister may, on the recommendation of the Commission, enter upon and take possession of the undertaking of the licensee or permit holder and operate the undertaking for and on account of the licensee or permit holder and at the risk and expense of the licensee or permit holder, remitting the balance, if any, of the net income derived from the undertaking to the licensee or permit holder.

(3)

Notwithstanding subsection (2), the Commission may, at any time, revoke the licence or permit of a licensee who contravenes subsection (1).

(4)

For the purposes of subsection (2)—

(a)

the entry and taking of possession by the Minister shall not prejudice the security of any debenture-holder or mortgagee of his right of enforcing such security;

(b)

the Minister shall only restore possession of the undertaking at such time when the Minister, in consultation with the Commission, is satisfied that the circumstances on account of which the entry was made no longer exist or will no longer hinder the proper functioning of the undertaking and that the licensee or permit holder has satisfied his obligations under this Act and the conditions of his licence or permit.

(5)

The application of subsection (2) or (3) shall not prejudice any claims which any consumer or other person may have against the licensee or permit holder arising from his failure to fulfil his obligations in terms of the conditions of his licence.

(6)

A person obstructing or causing obstruction to the Minister or any person authorised by him in the execution of the duties under this section, commits an offence and shall, on conviction, be liable to a fine not exceeding one hundred thousand shillings for each day or part thereof during which the offence continues.

36.
Suspension or revocation of licence or permit
(1)

The Commission may suspend or revoke a licence or permit where—

(a)

the undertaking or the execution of the works related thereto has not commenced at the expiry of twenty-four months from the date on which the licence or permit was granted, or at the expiry of any extended period which the Commission may allow;

(b)

it is satisfied that the licence or permit holder is either wilfully or negligently not operating in accordance with the terms and conditions of the licence or permit, or the provisions of this Act or any regulations thereunder;

(c)

the licensee or permit holder is adjudged bankrupt; or

(d)

the licensee or permit holder, at any time after commencement of the licence or permit, makes representation to the Commission that the undertaking cannot be carried on with profit, and ought to be abandoned, and, upon inquiry the Commission is satisfied that the representation is true.

(2)

Before suspending or revoking a licence or permit under this section, the Commission shall give a licensee or permit holder forty five days notice to show cause why the licence or permit should not be revoked.

(3)

A notice under subsection (2) shall—

(a)

set out the relevant condition of the licence or permit, or the requirement of the Act to which the breach is related;

(b)

specify the acts, omissions or other facts which, in the opinion of the Commission, constitute a contravention of the conditions or the Act, and the reasons why the Commission is of the opinion that any of the circumstances mentioned under subsection (1) have occurred or arisen; and

(c)

be served at the principal office of the licensee or permit holder and shall take effect from the date of service.

(4)

The Commission shall determine the matter within ninety days from the expiry of the notice.

(5)

Where a licence or permit is suspended or revoked, the Commission shall, in consultation with the Minister, take such action as is necessary to ensure that the supply of electrical energy to consumers is not unduly interrupted as a result of the revocation:

Provided that the revocation and suspension of licences and permits is not in contravention of any written law.

(6)

A suspension or revocation of a licence or permit under this section shall not indemnify the holder against any penalties for which such person may have become liable under the Act.

37.
Provisions where Commission suspends or revokes licence
(1)

Where the suspension or revocation of a licence under this Act is likely to interrupt or affect the importation, exportation, generation, transmission, distribution or supply of electricity to the consumers, the Minister may, after due consultation with the owners of the undertaking declare that the undertaking shall continue.

(2)

Where, under subsection (1) the Minister declares that an undertaking shall continue, the owners shall, within a reasonable time, sell and transfer the undertaking to other persons who have the technical, economic, financial and organizational capabilities to operate the undertaking:

Provided that the transfer amount shall be as agreed by the owners and the purchasers.

(3)

If the owner of the undertaking declines to sell and transfer the undertaking in accordance with the order of the Minister given under subsection (1), the Minister may appoint an independent valuer who shall value the undertaking and submit his valuation report to the Minister.

(4)

The Minister may, after receiving the report in accordance with subsection (3) proceed to sell the undertaking within a period of ninety days through an open tendering system, subject to the reserve price as may be determined by the valuer.

(5)

All proceeds of the sale of the undertaking under subsection (4) shall be remitted to the owner minus any reasonable costs incurred by the Minister or his authorised representative in effecting the sale.

(6)

The provisions of subsection (1) shall not prejudice the rights and interest of any debenture holder or secured creditors of the owner of the undertaking.

(7)

In the event that after the ninety day period is over, no bidder meets the minimum requirements of the tender, the Minister may appoint a competent person to operate the undertaking until such time that a suitable buyer is found.

(8)

A person who, without lawful or justifiable cause, obstructs the Minister or any person authorised by him in the carrying out of the sale or in operating the undertaking, authorised by this section, commits an offence and shall, on conviction, be liable to a fine not exceeding one hundred thousand shillings for each day or part thereof that the obstruction occurs or continues.

(9)

A person aggrieved by the order of the Minister or who disputes the value of the undertaking may refer the matter for determination through arbitration within sixty days of receipt of the Minister’s order or the report of the valuers.

38.
Electrical installation work
(1)

A person shall not carry out any electrical installation work unless the person is licensed by the Commission as an electrician or an electrical contractor.

(2)

To be licensed by the Commission as an electrical contractor a person must—

(a)

be a licensed electrician registered under the Institute of Engineers of Kenya; or

(b)

have in his employment, a licensed electrician.

(3)

A person who desires to be licensed as an electrician or an electrical contractor shall make an application in the form and manner prescribed by the Commission.

(4)

The Commission shall process all applications contemplated under subsection (3) expeditiously and in any case, not later than ninety days from the date of the application, and it may—

(a)

grant the licence or registration applied for accordingly, either without conditions or subject to such conditions as it may deem fit; or

(b)

refuse to grant the licence or registration applied for, giving reasons thereof.

(5)

A person who contravenes any of the foregoing provisions commits an offence and shall, on conviction, be liable to a fine not exceeding one million shillings, or to maximum term of imprisonment of one year, or to both.

39.
Replacement of a licence or permit
(1)

Where, upon application, it is shown to the satisfaction of the Commission that a licence or permit has been lost, destroyed or defaced, the Commission shall issue a duplicate licence or permit.

(2)

There shall be payable, upon replacement of a licence or permit under subsection (1), such fees as the Minister may, from time to time by regulations, prescribe.

40.
Keeping of register of licences, permits and approvals
(1)

The Commission shall maintain a register, in such form as it may determine, in which it shall enter the provisions, subject to subsection (2), of—

(a)

every licence, permit or approval granted;

(b)

every modification or revocation of such licence, permit or approval;

(c)

every direction or consent given or determination made with respect to such licence, permit or approval;

(d)

every order or revocation of such order and every notice, as appropriate; and

(e)

such other information as the Commission may deem necessary.

(2)

In entering any provision in the register, the Commission shall have regard to the need for excluding, so far as is practicable—

(a)

any matter which relates to the affairs of any person, where publication of that matter would or might, in the opinion of the Commission, be prejudicial to the interests of that person; and

(b)

any matter that would appear to the Commission to be against the public interest or the commercial interests of any person.

(3)

The contents of the register shall be available for inspection by the public, during such hours and subject to the payment of such fee as may be prescribed by the Commission.

(4)

A person may, on the payment of such fee as may be prescribed, require the Commission to supply him with a copy of, or extract of, any part of the register, being a copy or extract which is certified by the Commission to be a true copy or extract.

41.
Accounts, records and reports of licensee
(1)

For the purposes of this Act, where a person holds a licence or licences, the accounts of each undertaking under each licence shall, unless specifically exempted by the Commission, be subject to the provisions of this Act, and be kept separate and distinct and in the manner and form prescribed by the Commission:

Provided that—

(a)

the Commission may direct that the operations of a licensee holding more than one licence in respect of separate or contiguous areas of supply may be treated as a single undertaking for the purposes of this section;

(b)

a licensee holding two or more licences, the operations under which are not to be treated as a single undertaking under paragraph (a), or conducting any business or operations independent of his licence or licences, shall be required nevertheless to keep in the prescribed form additional or alternative sets of accounts, to be termed the Head Office Accounts, in respect of all such items as, in the opinion of the auditor appointed under subsection (2), cannot properly or reasonably be attributed or allocated to, and included in, the accounts of the undertaking of any one of such licences exclusively.

(2)

A licensee shall, at his own cost, cause the annual accounts to be examined and audited by independent auditors and submit the audited accounts to the Commission within three months after the end of each financial year.

(3)

A licensee shall, at the request of the Commission and at his own cost, provide all available information about the technical, financial, hydrological or environmental issues and any other relevant information relating to the operations of the licensee.

(4)

The Commission may exempt a licensee from the requirements of subsection (1) where—

(a)

it is satisfied with the form and manner in which the records and accounts of the licensee are kept and audited; or

(b)

such exemption is provided for in the licence.

42.
Powers of the Commission to enter, inspect and investigate
(1)

The Commission or any person authorized by the Commission in writing may—

(a)

at all reasonable times, enter upon the premises of a licence or permit holder and inspect or investigate any plant, machinery, books, accounts and other documents found thereat and take copies thereof;

(b)

require a licence or permit holder to furnish to the Commission, books, accounts, records and other documents in such form as the Commission may demand.

(2)

The Commission may require that the accuracy of any documents or particulars be verified.

(3)

A person authorized by the Commission under subsection (1), shall produce proof of such authorization at the request of any person affected by his activities.

(4)

A person who refuses to allow an inspection under subsection (1) commits an offence and shall, on conviction, be liable to a fine not exceeding one hundred thousand shillings for each day or part thereof that the obstruction occurs or continues.

(5)

A person who discloses information obtained upon an inspection or investigation under this section, other than—

(a)

information in the public domain for the purposes of carrying out his duties under this Act; or

(b)

upon the order of or in answer to questions put to him as a witness in a court of law or at a hearing before the Commission under this Act,

commits an offence and shall, on conviction, be liable to a fine not exceeding five hundred thousand shillings, or to a maximum term of imprisonment of six months, or to both.

Supply of Electrical Energy
43.
Contracts for bulk supply of electrical energy
(1)

All contracts for the sale of electrical energy, transmission or distribution services, between and among licensees, and between licensees and large retail consumers shall be submitted to the Commission for approval before execution.

(2)

An application for approval of a contract under subsection (1) shall be in such form and submitted to the Commission in such manner, as the Minister may, in regulations prescribe.

(3)

In considering a contract under subsection (1), the Commission shall—

(a)

ensure that the rates or tariffs established in the contract are just and reasonable;

(b)

satisfy itself that the application meets the minimum requirements as prescribed by the Minister in the regulations under this Act; and

(c)

take into account any other issues which may have a bearing on the operations of the undertakings.

(4)

In this section, a just and reasonable tariff shall mean a rate that enables a licensee to, inter alia

(a)

maintain its financial integrity;

(b)

attract capital;

(c)

operate efficiently; and

(d)

fully compensate investors for the risks assumed.

44.
Forms of contract for supply of electrical energy to consumers
(1)

Every person licensed to supply electrical energy shall use a form of contract approved by the Commission for such supply which shall set out the rights and responsibilities of the licensee and consumers.

(2)

In approving a form of contract under subsection (1), the Commission shall satisfy itself that such form of contract has fair and reasonable provisions dealing with issues, including but not limited to—

(a)

limitation of liability of the licensee;

(b)

disconnection procedures;

(c)

account and meter deposits;

(d)

consultation and notice of changes to any of the contract terms;

(e)

metering; and

(f)

complaint handling and dispute resolution.

45.
Tariffs and tariff structures and terms of supply
(1)

The tariff structure and terms for the supply of electrical energy shall be in accordance with principles prescribed by the Commission.

(2)

All tariffs charged for electrical energy supplied shall be just and reasonable.

(3)

Any application for the review of tariffs shall be filed with the Commission for approval not later than forty-five days before the proposed effective date:

Provided that the Commission may, at its discretion, suspend a schedule of tariffs increase for up to five months.

(4)

An application under subsection (3) shall be in the form prescribed by the Commission.

(5)

A licensee may require a consumer to make such account deposit, commensurate with the consumer’s estimated electrical energy consumption, before electrical energy is supplied to him, which deposit may, from time to time, be revised by the licensee in order to take account of both the level of consumption and of any changes in electrical energy tariffs.

(6)

The charges for electrical energy to be supplied may, subject to agreement between the parties, be paid in advance.

46.
Permission to survey and use land to lay electric supply lines
(1)

No person shall enter upon any land, other than his own—

(a)

to lay or connect an electric supply line; or

(b)

to carry out a survey of the land for the purposes of paragraph (a),

except with the prior permission of the owner of such land.

(2)

The permission sought in subsection (1) shall be done by way of notice which shall be accompanied by a statement of particulars of entry.

47.
Assent to proposal
(1)

An owner, after receipt of the notice and statement of particulars under section 46, may assent in writing to the construction of the electric supply line upon being paid such compensation as may be agreed and any assent so given shall be binding on all parties having an interest in the land, subject to the following provisions—

(a)

that any compensation to be paid by the licensee giving notice to the owner, in cases where the owner is under incapacity or has no power to assent to the application except under this Act, shall be paid to the legal representative of the owner;

(b)

that an occupier or person other than the owner interested in the land shall be entitled to compensation for any loss or damage he may sustain by the construction of the electric supply line, so long as the claim is made within three months after the construction of the electric supply line.

(2)

No assent expressed in writing in accordance with subsection (1) shall be void by reason only of non-compliance with any statutory requirements as to registration.

48.
Objection to proposal
(1)

An owner shall be deemed to have assented to a proposal to construct an electric supply line on his land if he fails to notify, in writing, the person desiring to construct an electric supply line, of his objection thereto within sixty days after the service on him of the notice required by section 46 and in the event of an objection, the Commission, on application by the licensee, shall determine—

(a)

what loss or damage, if any the proposed electric supply line will cause to the owner, or to the occupier or other person interested in the land;

(b)

whether any loss or damage that may be caused is capable of being fully compensated for by money.

(2)

The result of a determination under subsection (1) shall be as follows—

(a)

if the Commission determines that loss or damage will be caused to the owner, occupier or other party interested in the land and that the loss or damage is—

(i) of a nature that may be fully compensated for by money, the Commission shall proceed to assess the compensation and to apportion it amongst the owner, occupier and other parties who may in the judgment of the Commission be entitled to compensation and on payment of the sum so assessed the person giving notice may proceed to construct or lay the proposed electric supply line;
(ii) not of a nature that may be fully compensated for by money the person giving notice shall not be entitled to construct or lay the proposed electric supply line;
(b)

if the Commission determines that no loss or damage will be caused to the owner, occupier or other party interested in the land the person giving notice may forthwith proceed to construct or lay the electric supply line.

49.
Procedure before Commission
(1)

Where an application is made under section 48, the Commission may summon the parties to appear before it at a time and place to be named in the summons and upon the appearance of the parties or in the absence of any of the parties, upon proof of due service of the summons, the Commission may hear and determine the question and amount of compensation and for that purpose may examine the parties and their witnesses on oath.

(2)

The costs of the inquiry pursuant to subsection (1) shall be determined by the Commission.

50.
Payment of compensation by the Commission
(1)

If any difficulty or question arises as to the person entitled to compensation payable under this Act, the Commission shall order compensation to be paid to the Commission pending the making of an application under subsection (2).

(2)

Upon an application by a person making claim to any compensation paid to the Commission under subsection (1), the Commission may at the cost of the person making the application give notice to such persons as it deems fit in accordance with sections 46 and 48 and after such notice the Commission shall direct or order distribution and payment of the compensation according to the respective rights and interests of the persons making claim to such compensation or any part thereof, and may further make such other orders in the premises as it deems fit.

51.
Power of the licensee to enter land to inspect or repair lines
(1)

After electric supply lines have been laid in accordance with this Act, the licensee or any person authorised by the licensee may, from time to time as it becomes necessary, enter the land on which the electric supply lines are laid, with such assistance as may be necessary, for the purpose of inspecting or repairing the lines, or removing such lines in case where the electric supply lines are no longer required.

(2)

Where electric supply lines are removed, the surface of the land shall forthwith be restored to its former condition as far as possible and in default thereof restoration may be carried out by the owner of the land, and the costs thereof shall be recoverable from the licensee.

52.
Liability of licensee to make compensation for damage

The provisions of this Act shall not relieve a licensee of the liability to make compensation to the owner or occupier of any land or the agents, workmen or servants of the owner or occupier of any land which is the subject of the provisions of this Act, for damage or loss caused by the exercise or use of any power or authority conferred by this Act or by any irregularity, trespass or other wrongful proceeding in the execution of this Act, or by the loss or damage or breaking of any electric supply line, or by reason of any defect in any electric supply line.

53.
Laying of electric supply lines along roads, railways, etc.
(1)

For the purpose of the conveyance, transmission, or supply of electrical energy, a licensee may erect, fix, install or lay any poles, wires, electric supply lines, power or other apparatus in, upon, under, over or across any public streets, road, railways, tramways, rivers, canals, harbours or Government property, in the manner and on the conditions as provided in this Act.

(2)

Notwithstanding the provisions of any other written law, but subject to the provisions of this section, a licensee may break up any street within his area of supply, and may erect posts and lay or construct power lines or electric supply lines along, under or over any such street, and may, from time to time, repair, alter or remove any posts or lines so erected, laid or constructed:

Provided that the person having the control of such street shall have a prior right to break up and repair such street with reasonable despatch upon payment to him of a reasonable charge by the licensee.

(3)

A licensee shall, not less than thirty days before exercising any power conferred upon him by this section, give notice in writing to the owner of his intention to do so, except in a case of emergency and in such case the licensee shall notify the owner as soon as possible after the emergency has arisen.

(4)

The powers conferred upon a licensee by this section shall, except in a case of emergency, be exercised only under the superintendence of the person concerned and according to a plan showing the route and in terms of specifications approved by that person, or, if any dispute arises in respect of such plan, route or specifications, as may be approved by the Commission:

Provided that if the said person fails to exercise the powers of superintendence conferred by this section the licensee may, after giving notice, exercise those powers without such superintendence.

(5)

Whenever a licensee carries out any work authorized by this section, he shall comply with the by-laws, if any, of the local authority concerned and shall complete that work with reasonable despatch and reinstate the street broken up and remove any debris or rubbish occasioned thereby and shall, while the street is broken up or obstructed, cause the works to be, at all times, fenced and guarded and during the night, adequately lit.

(6)

If the licensee fails or unreasonably delays in carrying out the work referred to in subsection (5), the local authority concerned may cause the work to be executed at the expense of the said licensee.

(7)

A licensee shall pay to the said local authority the costs reasonably and necessarily incurred by it in executing such work.

(8)

Nothing in this section shall be construed as relieving a licensee of any liability in respect of any loss or damage caused by his negligence in carrying out such work or by his failure to comply with the provisions of this section.

54.
Compulsory acquisition of land
(1)

Where a licensee requires the compulsory acquisition of land for any of the purposes of a licence, the licensee may apply to the Minister to acquire the land on his behalf.

(2)

Where the Minister in consultation with the Commission is satisfied that it is in the public interest to do so, he may acquire the land in accordance with the relevant laws.

(3)

Where land is acquired on behalf of the licensee under subsection (2), the licensee shall bear all the costs in relation thereto.

55.
Power to lop trees and hedges
(1)

Where any tree or hedge obstructs or interferes with the construction by a licensee of any electric supply line, or interferes or is likely to interfere with the maintenance or working of any electric supply line, owned by any licensee, such licensee shall give a seven days notice to the owner or occupier of the land on which the tree or hedge is growing, requiring the person to lop or cut it so as to prevent the obstruction or interference of the electric supply line, subject to the payment by such licensee of the expenses reasonably incurred by the owner or occupier of the land in complying with the notice:

Provided that in any case where such a notice is served upon an occupier who is not the owner of the land on which the tree or hedge is growing, a copy of the notice shall also be served upon the owner thereof, if his address is known.

(2)

If within twenty-one days from the date of giving such notice the owner or occupier of the land on which the tree or hedge is growing gives a counter-notice to the licensee objecting to the requirements of the notice, the matter shall, unless the counter-notice is withdrawn following consultations between the licensee and the owner or occupier, be referred to the Commission for determination and the Commission may, after giving the parties an opportunity to be heard, make such orders as it thinks just, and any such order may empower the licensee, after giving a seven day prior notice to any such person by whom the counter-notice was given of the commencement of the work as the order may direct, to cause the tree or hedge to be lopped or cut, and may determine any question as to what compensation, if any, and expenses are to be paid:

Provided that any party aggrieved by any decision of the Commission with regard to compensation may within thirty days after being notified of such decision appeal to the Tribunal.

(3)

The licensee shall issue instructions to his servants and agents with a view to ensuring that trees and hedges shall be lopped or cut in a way that little damage as possible is done to trees, fences, hedges and growing crops, and shall cause the boughs lopped to be removed in accordance with the directions of the owner or occupier, and shall make good any damage done to land.

(4)

Any compensation or expenses payable to the owner or occupier by the licensee under this section shall be a civil debt recoverable summarily.

(5)

Where it is necessary to fell any trees, this section shall apply to the felling of trees mutatis mutandis as it applies to the lopping of trees.

(6)

This section shall apply to electric supply lines owned or to be constructed by any licensee regardless of the type of licence he holds.

56.
Electric supply lines

The licensee shall lay down or erect and keep in good state of repair suitable and sufficient electric supply lines for the purpose of enabling supply to be given in the area of supply specified in that behalf in the licence.

58.
Quantity of electrical energy supplied and metering
(1)

The amount of electrical energy supplied to the consumer or the number of hours during which the supply is given, or the maximum demand taken by the consumer, or any other quantity or time connected with the supply shall be ascertained by meters of a type approved by the Kenya Bureau of Standards, or determined in a manner agreed upon by the licensee and the consumer.

(2)

The licensee shall supply and fix meters, on hire, upon the premises of the consumer and connect the supply system therewith, and the consumer shall pay to the licensee for the hire of any such meter or meters, such costs as may be approved by the Commission:

Provided that the licensee shall allow the consumer, if the consumer so wishes, to supply the meter or meters for the purpose of determining the quantity of the supply.

(3)

The meters, whether the property of the licensee or of the consumer, shall be sealed by the licensee with an approved seal bearing the licensee’s distinguishing brand or mark impressed thereon.

(4)

The licensee may, in order to protect any meter or meters or any other apparatus belonging to him, install suitable cut-outs on a consumer’s premises on the supply side of any such meter or other apparatus, and seal such cut-outs with an approved seal bearing the licensee’s distinguishing brand or mark impressed thereon.

(5)

Where any seal affixed under subsection (3) or (4) is broken without the authority of the licensee, the consumer upon whose premises the seal was placed commits an offence and shall, on conviction, be liable to a fine not exceeding one million shillings or to a maximum term of imprisonment of one year or to both:

Provided that, where it can be proved that the offence was committed by some person other than the consumer, that person shall be punishable as if he were the consumer upon whose premises the breach occurred.

(6)

Where a consumer who is supplied with electrical energy by the licensee has provided a meter for the purpose of ascertaining the quantity of electrical energy supplied and the licensee changes the method of charging for electrical energy supplied by him, the licensee shall either pay to that person the reasonable expenses which he may have incurred in providing a new meter for the purpose of ascertaining the quantity of electrical energy supplied according to the new method of charging, or provide such consumer with a new meter.

(7)

A consumer shall be entitled to install in his premises a check meter or meters for the purpose of checking the quantity of electrical energy supplied to him but the registrations of such check meter shall not be taken into account in determining the quantity of electrical energy supplied to him and no such check meter shall be fixed and connected with the supply system except in such manner and subject to such conditions as the licensee may approve.

(8)

The licensee shall not connect or disconnect any meter to be used for ascertaining the quantity of electrical energy supplied, or a consumer’s check meter, or from any electric supply line through which electrical energy is supplied by the licensee, unless he has obtained the written consent of that person, or alternatively unless he has given to that person not less than forty eight hours’ written notice of his intention to do so.

(9)

The licensee shall not make any alteration, adjustment or readjustment in any meter being used for ascertaining the quantity of electrical energy supplied, as to affect the functioning of such meter unless the licensee has given to the consumer not less than forty eight hours’ written notice of the intention to do so or unless otherwise mutually arranged.

(10)

The consumer shall, at all times and at his own expense, keep all meters belonging to him and used for ascertaining the quantity of electrical energy supplied, in proper order for correctly registering that quantity, and, in default, the licensee may cease to supply electrical energy through the meter until the defect is rectified.

(11)

The licensee shall, at all times, at his own expense, keep all meters let for hire by him to any person, for ascertaining the quantity of electrical energy supplied, in proper order for correctly registering that quantity, and in default the said person shall not be liable to pay any charges for hire of the meter during such time as the default continues.

(12)

The licensee shall, subject to the provisions of section 51, for the purposes of this section, have access to, and be at liberty to remove, test, inspect and replace any meters installed by the consumer for the purpose of ascertaining the quantity of electrical energy supplied at all reasonable times.

(13)

A person who contravenes the provisions of this section commits an offence and shall, on conviction, be liable to fine not exceeding five hundred thousand shillings, or to a maximum term of imprisonment of one year, or to both.

59.
Defective meters
(1)

Where a meter used to register the quantity of electrical energy supplied by a licensee to any consumer is found to be defective through no fault of the licensee or the consumer, the licensee may, in consultation with the consumer, determine the reasonable quantity of electrical energy supplied and recalculate the charges due to or from the consumer as appropriate for up to a maximum period of six months from the date the meter is established to be defective:

Provided that if the consumer had reported any suspected defect in the meter and the licensee did not immediately examine the meter, the licensee shall not be entitled to recover from the consumer any charges for more than three months from the date the meter was established to be defective.

(2)

Where any meter used to register the quantity of electrical energy supplied by any licensee to any consumer is found to be defective through interference by the consumer, the licensee may determine the reasonable quantity of electrical energy supplied and recalculate the charges due from consumer as appropriate from the date the licensee determines the meter to have been interfered with:

Provided that if the subject meter is no longer suitable for ascertaining the quantity of electrical energy supplied, the licensee shall be entitled to repair or replace the meter at the cost of the consumer who interfered with it.

(3)

If any dispute arises under this section as to recalculation of electrical energy supplied to a consumer or as to interference with any meter, such dispute shall be referred to the Commission for determination.

60.
Electric supply lines, meters and other apparatus are not fixtures
(1)

Any electric supply lines, meters, fittings, works or apparatus belonging to a licensee and lawfully placed or installed in or upon any premises not belonging to the licensee, whether or not fixed to any part of such premises shall—

(a)

remain the property of and may be removed by the licensee;

(b)

not be subject to the landlord’s distress for rent in such premises; and

(c)

not be liable to be taken in execution under any process of law or any proceedings in insolvency or liquidation against the owner or occupier of such premises:

Provided that adequate indication is given on such premises that such licensee is the actual owner of such lines, meters, fittings, works or apparatus.

(2)

For the purposes of this section and of section 58, lines, meters, fittings and apparatus let, rented or disposed of by the licensee on terms of payment by instalments shall, until such instalments have been paid, be deemed to belong to the licensee.

62.
Power of the Minister to provide electric lines or funds

Where, in the opinion of the Minister, a supply of electrical energy should be obtained from any licensee or permit holder and after investigation, it is considered uneconomical or commercially inexpedient to provide for the necessary works as specified in that behalf, the Minister, may with the approval of the National Assembly, undertake in whole or in part the provision of any such works or of the funds necessary to defray the charges thereon or may guarantee such payments, upon such terms and conditions as the Minister may consider necessary or expedient.

63.
Regulations for electrical energy
(1)

Without limiting the generality of sections 5 and 6 and in accordance with section 110, the Minister may, on the recommendation of the Commission, make such regulations as may be necessary or expedient for the achievement of the objectives and purposes of this Act and in particular, for all or any of the following purposes—

(a)

prescribing the form and manner in which any application for review or adjustment of tariffs is to be made and the procedure for the review or adjustments of tariffs;

(b)

providing the procedure for application and transfer of licences;

(c)

prescribing generally the duties and obligations of licensees, permit holders, undertakers and consumers;

(d)

prescribing the form and manner in which every licensee shall keep his accounts and records of income and expenditure for the purposes of this Act;

(e)

providing for the securing the safety of the public from danger, personal injury or damage to property arising from the production, transmission, transportation, transformation, distribution, supply or use of electricity;

(f)

providing for the reporting of accidents to the Commission which have resulted in the loss of life, personal injury or damage to property;

(g)

providing for the inspection of and enquiry into the operation of undertakings;

(h)

providing for the measurement of electrical energy and the settlement of disputes as to measurements of electrical energy;

(i)

providing for the conditions on which new electricity connections may be made to any premises;

(j)

prescribing the conditions on which electrical energy supplied to a person may be resold to another person;

(k)

prescribing standards with regard to the quality, safety and reliability of supply of electrical energy and related installations; and

(l)

prescribing the procedures for hearings, settlement of disputes and any proceedings before the Commission.

Offences
65.
Hindering, obstructing or interfering with the exercise of licensee powers

A person hindering, obstructing or interfering with the exercise by a licensee with regard to an electric supply line, or by the servants or agents duly authorised in writing of any such licensee, of any right of entry upon land conferred by this Act for the purpose of laying and connecting, or repairing, inspecting or removing, an electric supply line commits an offence and shall, on conviction, be liable to a fine not exceeding one hundred thousand shillings for each day or part thereof that the obstruction occurs or continues.

Rural Electrification
66.
Establishment of the Rural Electrification Authority
(1)

There is established an Authority to be known as the Rural Electrification Authority (hereinafter referred to as “the Authority”).

(2)

The Authority shall be a body corporate with perpetual succession and a common seal and shall, in its corporate name, be capable of—

(a)

suing and being sued;

(b)

taking, purchasing or otherwise acquiring, holding, charging or disposing of movable and immovable property;

(c)

borrowing and lending money; and

(d)

doing or performing all other things or acts for the furtherance of the provisions of the Act which may be lawfully done or performed by a body corporate.

67.
Functions of the Authority

The Authority shall—

(a)

manage the Rural Electrification Programme Fund established under section 79;

(b)

develop and update the rural electrification master plan;

(c)

implement and source additional funds for the rural electrification programme;

(d)

promote use of renewable energy sources including but not limited to small hydros, wind, solar, biomass, geothermal, hybrid systems and oil fired components taking into account specific needs of certain areas including the potential for using electricity for irrigation and in support of off-farm income generating activities;

(e)

manage the delineation, tendering and award of contracts for licences and permits for rural electrification; and

(f)

to perform such other functions as the Board may direct.

68.
Board of the Authority
(1)

There shall be a Board of Directors of the Authority which shall consist of—

(a)

a Chairperson appointed by the President;

(b)

the Permanent Secretary in the Ministry for the time being responsible for energy or his representative;

(c)

the permanent Secretary in the Ministry for the time being responsible for finance or his representative; and

(d)

a minimum of four and a maximum of eight other members appointed by the Minister.

(2)

A member of the Board shall hold office—

(a)

in the case of the Chairperson, for a period of five years;

(b)

in the case of any other member, for a period of three years.

(3)

A member of the Board may be re-appointed for one further term.

(4)

A person shall be qualified for appointment as a Chairperson under subsection (1)(a) or member under subsection (1)(d) of the Board if such person—

(a)

is a holder of a university degree recognized in Kenya in the fields of engineering, physical sciences, law, finance, economics or energy; and

(b)

has at least fifteen years experience in the relevant field, five of which is at a senior management level.

69.
Conduct of business and affairs of the Board

The conduct and regulation of the business and affairs of the Board shall be as provided in the Second Schedule.

70.
Chief Executive and other staff of the Authority
(1)

The Minister may, on recommendation of the Authority, appoint a Chief Executive of the Authority from a list of three names of persons submitted by the Board through competitive selection.

(2)

The person appointed under subsection (1) shall be the chief executive of the Authority and, subject to the directions of the Board, be responsible for the day-to-day management of the Authority.

(3)

The Authority may appoint such other officers and staff as may be necessary for the efficient discharge of its functions.

71.
Remuneration

The Authority shall pay its members and staff such salaries and allowances as it shall determine in consultation with the Minister.

72.
The common seal
(1)

The common seal of the Authority shall be kept in such custody as the Board may direct and shall not be used except on the order of the Board.

(2)

The common seal of the Authority when affixed on a document and duly authenticated shall be judicially and officially noticed unless and until the contrary is proved any necessary order or authorization by the Board under this section shall be presumed to have been duly given.

(3)

The affixing of the common seal of the authority shall be authenticated by the signature of the chairperson and the Chief Executive Officer and any document not required by law to be made under seal and all decisions of the Board may be authenticated by the signature of the chairperson and the Chief Executive Officer:

Provided that the Board shall, in the absence of either the chairperson or the Chief Executive Officer in any particular matter, nominate one member to authenticate the seal on behalf of the chairperson or the Chief Executive Officer.

73.
Protection from personal liability

No matter or thing done by a member of the Board or any officer, employee or agent of the Authority shall, if the matter or thing is done bona fide for executing the functions, powers or duties of the Authority, render the member, officer, employee or agent, any other person acting on his directions personally liable to any action, claim or demand whatsoever.

74.
Liability of the Board for damages

The provisions of section 73 shall not relieve the Authority of the liability to pay compensation or damages to any person for an injury to him, his property or any of his interests caused by the exercise of the powers conferred on the Board by this Act or by any other written law or by the failure, whether wholly or partially, of any works.

75.
Financial year

The financial year of the Authority shall be the period of twelve months ending on the thirtieth June in each year.

76.
Annual estimates

At least three months before the commencement of each financial year, the Board shall cause to be prepared estimates of the revenue and expenditure of the Authority for that year.

77.
Accounts and audit
(1)

The Board shall cause to be kept proper books and records of accounts of the income, expenditure and assets of the Authority.

(2)

Within a period of three months after the end of each financial year, the Board shall submit to the Controller and Auditor-General or to an auditor appointed under this section, the accounts of the Authority together with—

(a)

a statement of the income and expenditure of the Authority during that year; and

(b)

a detailed balance sheet of the Authority on the last day of that year.

(3)

The accounts of the Authority shall be audited and reported upon in accordance with the provisions of the Public Audit Act, 2003 (No. 12 of 2003) by the Controller and Auditor-General or by an auditor appointed by the Board with the approval of the Controller and Auditor-General.

78.
Electricity sales levy

The Minister may impose a levy of up to five percent on all electricity consumed in the country, the proceeds of which shall go into the Rural Electrification Programme Fund, set up under section 79.

79.
Rural Electrification Programme Fund
(1)

The Minister shall establish a fund to be known as the Rural Electrification Programme Fund to support the electrification of rural areas and other areas, considered economically unviable for electrification by licensees.

(2)

The Rural Electrification Programme Fund consists of—

(a)

the electricity sales levy as provided under section 78;

(b)

fees and other charges levied by the Commission under this Act;

(c)

such moneys as may be appropriated by Parliament for that purpose;

(d)

donations, grants and loans; and

(e)

all other moneys lawfully received or made available for the programme as the Minister may approve.

(3)

The Authority shall keep books and records of accounts and shall cause regular audits of such books and records to be undertaken.

PART IV – PETROLEUM
Licensing
80.
Licence for petroleum business
(1)

A person shall not conduct a business of importation, refining, exportation, wholesale, retail, storage or transportation of petroleum, except under and in accordance with the terms and conditions of a valid licence.

(2)

A licensee shall not sell petroleum to a person for the purpose of exportation or for resale in Kenya unless that person has a valid exporters or retail licence under this Act.

(3)

A person shall not use a vehicle for the purpose of transporting petroleum unless there is in force, in respect of that vehicle, a valid petroleum permit issued under this Act.

(4)

No person shall drive a vehicle, or engage a driver, for the purpose of transporting petroleum unless such driver is certified for that purpose in accordance with this Act.

(5)

A person who contravenes this section commits an offence and shall, on conviction, be liable to a fine not exceeding one million shillings, or to a maximum term of imprisonment of one year, or to both.

81.
Licensing Agents

The Commission may, in accordance with section 23 appoint competent and impartial persons to be licensing agents for the purpose of issuing licences under this Act.

82.
Granting of licences
(1)

A person desirous of obtaining a licence under this Act shall make an application to the Commission or licensing agent in the manner prescribed by the Commission, and the Commission or licensing agent may, within thirty days—

(a)

grant a licence accordingly, either without conditions or subject to such conditions as the commission may deem fit and shall be accompanied by the prescribed fee;

(b)

refuse to grant such licence.

(2)

Where the Commission or licensing agent—

(a)

refuses to grant a licence; or

(b)

imposes conditions on a licence,

the Commission or licensing agent shall give to the applicant, the reasons in writing for the action.

(3)

A licence issued under this Act shall be valid for one year from the date of issue.

(4)

An application for a renewal of a licence shall be made at least thirty days before the expiry date of the current licence and must be accompanied by the prescribed fee.

(5)

If the Commission or the licensing agent is satisfied that the applicant continues to meet the requirements for the issue of the licence, the Commission or the licensing agent shall renew the licence.

(6)

If an application for the renewal of a licence has been made before the expiry of the licence but has not been dealt with by the Commission or the licensing agent when the licence is due to expire, the licence continues in force until the application for renewal is dealt with and any renewal in such a case shall be taken to have commenced from the day when the licence would have expired before the renewal.

(7)

A person who contravenes subsection (4) shall be liable to a penalty equivalent to twenty per cent of the licence fee.

(8)

A licence shall specify the nature of petroleum business and the premises at which the licensee may conduct his business and where a petroleum business is conducted at more than one premises, a separate licence shall be required for each of such premises.

83.
Amendment of licences
(1)

Subject to the provisions of this Act, a person may make an application in the prescribed manner for amendment of the licence, and the Commission or the licensing agent may, upon payment of the prescribed fee, amend the licence and endorse it accordingly.

(2)

Where the Commission or the licensing agent refuses to amend a licence under subsection (1), the Commission or licensing agent shall give to the applicant, if the applicant so requests, the reasons in writing for the refusal.

(3)

A licence amended under this section shall retain the existing expiry date.

84.
Display of licences or permits
(1)

Every licence or permits shall, except when lodged with the Commission or licensing agent for any of the purposes of this Act, be displayed in a prominent position on the premises in respect of which it is issued.

(2)

A licensee or permit holder who contravenes the provision of subsection (1), commits an offence and shall, on conviction, be liable to a fine not exceeding one hundred thousand shillings for each day or part thereof that the licence is not displayed.

85.
Revocation of licence
(1)

The Commission or licensing agent may suspend or revoke a licence where—

(a)

the undertaking or the execution of the works related thereto has not commenced at the expiry of twenty-four months from the date on which the licence or permit was granted, or at the expiry of any extended period which the Commission may allow;

(b)

it is satisfied that the licensee is either wilfully or negligently not operating in accordance with the terms and conditions of the licence, permit or the provisions of this Act or any regulations thereunder; or

(c)

the licensee is adjudged bankrupt.

(2)

Unless otherwise specified in the licence, the Commission or licensing agent may give a licensee fourteen days notice to show cause why the licence should not be revoked.

(3)

A notice under subsection (2) shall—

(a)

set out the relevant condition of the licence or the requirement of the Act to which the breach relates;

(b)

specify the acts, omissions or other facts which, in the opinion of the Commission or the licensing agent, constitute a contravention of the conditions of the licence or requirements of the Act, and the reasons why the Commission or licensing agent is of the opinion that any of the circumstances mentioned under subsection (1) have occurred or arisen; and

(c)

be served at the licensed premises and shall take effect from the date of service.

(4)

The Commission or licensing agent shall determine the matter within thirty days from the expiry of the notice.

(5)

Any suspension or revocation of a licence shall not indemnify the licensee against any penalties for which such person may have become liable under the Act.

86.
Replacement of a licence

Where, upon application, it is shown to the satisfaction of the Commission or licensing agent that a licence has been lost, destroyed or defaced, the Commission or licensing officer shall, upon payment of the prescribed fee, issue a duplicate licence to the licensee.

87.
Transfer of a licence
(1)

A licensee shall not transfer or otherwise divest any rights, powers or obligations conferred or imposed upon him by the licence without the consent of the Commission.

(2)

The Commission may, on application by any of the following persons, transfer a licence or permit—

(a)

in the case of a death of the licensee or permit holder, to the legal representative of such licensee or permit holder;

(b)

in the case of the bankruptcy of the licensee or permit holder or assignment for the benefit of his creditors generally, to the lawfully appointed trustee or assignee;

(c)

in the case of a corporation in liquidation, to the lawfully appointed liquidator;

(d)

in any case where the licensee becomes subject to a legal disability, to any person lawfully appointed to administer his affairs; or

(e)

in the case of voluntary transfer of the undertaking, to the new owner of the undertaking.

(3)

The Commission shall satisfy itself of the legal, technical and financial competence of the transferee to carry out the undertaking.

(4)

The transferee shall undertake in writing to comply with the licence conditions.

(5)

The Commission shall not withhold any consent to any application to transfer unless it has reason to believe that public interest is likely to be prejudiced by the transfer.

(6)

In this section—

“controlling interest” as used with respect to any person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management of that person, whether through the ownership of shares, voting, securities, partnerships or other ownership interests, agreements or otherwise;

“transfer of licence” includes the acquisition of a controlling interest directly or indirectly in the licence holder.

88.
Register of licences and permits
(1)

The Commission shall keep a register, in such form as it may determine, of all licences and permits granted and shall record therein, in respect of each licence or permit—

(a)

the particulars required under sections 82 and 91;

(b)

particulars of any duplicate issued or any amendment of the licence or permit made under sections 83 and 86;

(c)

particulars of any suspension or revocation of the licence or permit under section 85; and

(d)

such other particulars as may be prescribed.

(2)

Subject to subsection (3), any person may, during office hours, and upon payment of the prescribed fee, inspect the register of licences and permits.

(3)

Notwithstanding the provisions of subsection (2), a person who is—

(a)

a member of the police force or a public officer acting in the course of his duty; or

(b)

an employee of the Commission or person authorised in writing by the Commission,

may inspect the register without payment of any fee.

89.
Appeal against action of the Commission or a licensing agent

A person aggrieved by the action of the Commission or a licensing agent in—

(a)

refusing to renew or grant a licence or revoking a licence; or

(b)

imposing conditions on a licence; or

(c)

refusing to replace or amend a licence,

may, within thirty days of receipt by him of written notification of such action, in writing appeal, to the—

(a)

Tribunal in case of an appeal against the Commission; or

(b)

Commission in case of an appeal against a licensing agent,

whose decision shall be communicated within forty-five days of receipt of the appeal by the Tribunal (or the Commission as the case may be) from any such aggrieved person.

90.
Construction permits
(1)

Any person intending to construct a pipeline, refinery, bulk storage facility or retail dispensing site shall, before commencing such construction, apply in writing to the Commission for a permit to do so.

(2)

An application under subsection (1) shall—

(a)

specify the name and address of the proposed owner;

(b)

be accompanied by three copies of plans and specifications;

(c)

in the case of a pipeline—

(i) specify the points, between which the proposed pipeline is to run;
(ii) state what is to be transported by the proposed pipeline;
(d)

in the case of a refinery, bulk liquefied petroleum gas, or natural gas facility specify the location, type and capacity;

(e)

be accompanied by an environmental impact assessment report; and

(f)

contain such other details as may be necessary.

(3)

The Commission shall consider every application received under this section and shall, if satisfied that the applicant meets the prescribed requirements, grant to the applicant, within forty five days, the permit to construct a pipeline, refinery, bulk storage facility, bulk liquefied petroleum gas facility, natural gas facility or retail dispensing site, as the case may be.

(4)

A permit shall be subject to such conditions as may be prescribed.

(5)

Where the Commission refuses to grant a permit under this section, it shall notify the applicant of such refusal specifying the reasons therefor and shall deliver such notice to the applicant personally or by registered post.

91.
Conditions for granting permits
(1)

The Commission shall, before issuing a permit under section 90, take into account all relevant factors, including but not limited to—

(a)

the relevant Government policies;

(b)

compliance with the Environmental Management and Co-ordination Act, 1999 (No. 8 of 1999) and in particular, the report of the Environmental (Impact Assessment and Audit) Regulations, 2003, the Physical Planning Act, 1996 (No. 6 of 1996), the Local Government Act (Cap. 265) and any other relevant legislation;

(c)

the financial capability of the applicant and methods of financing the proposed pipeline, refinery, bulk storage facility, or retail dispensing site; and

(d)

any other matter which, in the opinion of the Commission, may be affected by the granting or the refusal of the permit being sought.

(2)

A permit shall contain such terms and conditions as the Commission may deem appropriate, including but not limited to the—

(a)

duration of the permit;

(b)

person authorised to execute the works;

(c)

area in which the works shall be executed; and

(d)

conditions to be satisfied before any works authorised by the permit are used, which may include a requirement for the execution of further works.

(3)

Where a permit contains conditions prescribed in subsection (2)(d), no person shall, before the conditions are satisfied, use any works the execution of which was authorised by the permit, except to the extent specified in a notice given by the Commission to the holder of the permit specifying the extent to which the works may be used, notwithstanding that some of the conditions have not been satisfied and such permit may, at any time, be revoked by the Commission in a subsequent notice in the Gazette.

(4)

A notice given by the Commission under subsection (3) shall be conclusive evidence for the purposes of this Act that those conditions have been satisfied.

(5)

Where a permit referred to in subsection (3) is cancelled or otherwise ceases to be in force prior to the completion of the authorised works, the holder shall, to the extent of partially executed works, be deemed to have satisfied the prescribed conditions.

92.
Exemption from the requirement for a permit

Notwithstanding any other provision of this Act—

(a)

emergency works for the construction of a pipeline, may be executed without any authorisation by the Commission:

Provided

that as soon as is reasonably practicable and in any event not later than sixty days after the works have commenced or have been executed, the owner of the pipeline shall inform the Commission in writing of the works executed attaching copies of detailed construction drawings of such construction works and the route taken or intended to be taken by the pipeline;

(b)

no permit shall be required for the construction of a pipeline within a storage depot, a pipeline facility or refinery.

93.
Suspension or revocation of a construction permit
(1)

Subject to subsection (2), the Commission may, by notice in the Gazette, suspend or revoke a construction permit if any term or condition thereof has not been complied with within the prescribed period.

(2)

Where the Commission intends to revoke or suspend a permit under this section, it shall, at least twenty-one days before the date of the intended revocation or suspension, notify the holder of the permit of such intention, specifying the reasons thereof, and shall take every precaution to ensure fairness in the exercise of this power.

(3)

The Commission may in writing, reinstate a permit revoked or suspended under subsection (1) if satisfied that the reasons for the revocation or suspension no longer exist.

94.
Validity of permits

If, after a permit to construct a pipeline, a refinery, a bulk storage facility or a retail dispensing site has been granted, the execution of the works has not commenced at the expiry of twelve months from the date on which the permit was granted, or at the expiration of any extended period which the Commission may allow, the permit shall cease to have effect.

96.
Maintenance of minimum operational stocks

It shall be the duty of a person licensed to import petroleum to maintain such quantities of petroleum and at such locations as may be prescribed by the Minister in consultation with the Commission.

97.
Power of the Minister to provide strategic petroleum stocks

The Minister may undertake in whole or in part, the provision of financing, procurement, maintenance and management of petroleum strategic stocks.

98.
Compliance with environmental, health and safety standards
(1)

A person engaged in petroleum business shall comply with the relevant Kenya Standard and in the absence of such standard, any other standard approved by the Commission from time to time on environment, health and safety in consultation with the relevant authorities and in conformity with the relevant statutes touching on environment, health and safety standards.

(2)

In the event of a fire, explosion, oil spill, injury or fatality occurring in the course of operating a petroleum facility or transportation of petroleum, either by accident or through negligence, the operator or person transporting petroleum shall forthwith clean up the polluted or damaged environment, at his own expense, to the satisfaction of the Commission and other relevant authorities:

Provided that any person engaged in the transportation of petroleum and petroleum products shall have an oil clean-up plan in compliance with the national oil policy.

(3)

If the operator or person transporting petroleum fails, or unreasonably delays, to carry out the work referred to in subsection (2), the Commission may cause any work not carried out to be executed at the expense of the said operator or person transporting petroleum.

(4)

Nothing contained in this section shall be construed as relieving the operator or person transporting petroleum from any liability in respect of any loss or damage caused by his failure to comply with safety measures as required in subsection (5).

(5)

A person transporting petroleum by road, rail, coastal or inland waters, pipeline or any other mode shall institute measures to ensure that their mode of transportation is safe.

(6)

The Commission may, at any time, require the operator of a facility or a transporter to show that he is in compliance with the provisions of this section.

99.
Designated parking places reserved exclusively for petroleum tankers
(1)

A local authority shall designate a place or places exclusively reserved for parking of petroleum tanker vehicles.

(2)

A local authority that contravenes subsection (1) commits an offence and shall be liable, on conviction, to pay a fine of fifty thousand shillings for each day or part thereof that the offence continues.

Offences