energy regulatory commissionrenewableenergy.go.ke/downloads/strategy-docs/erc-strategic-plan.pdf ·...
TRANSCRIPT
VISION
To be a world class energy sector regulator that facilitates and enhances delivery of sustainable,
quality and robust energy services
MISSION
To regulate the energy sector in a fair,transparent and predictable manner
CORE VALUES
Professionalism Teamwork
PredictabilityTransparency
IntegrityAccountability
ResponsivenessIndependence
STRATEGIC OBJECTIVES
To protect the interests of energy users by ensuring that demand is met with reliable, cost effective and high quality energy services in an environmentally friendly manner
To protect the interests of consumers, investors and other stakeholders
To influence, advise on and implement government policy in order to meet the statutory objects and functions set for the ERC
To be at the forefront of planning, research, preservation and dissemination of energy sector data, information and best practice
To strengthen the ERC’s institutional capacity to discharge its functions
Cont
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CONTENTS
Figures and Tables ..............................................................2
Abbreviations ......................................................................3
Definitions of Terms ...........................................................4
From the Chairman .............................................................5
From the Director General ................................................6
Executive Summary ............................................................7
Who we are ..........................................................................9
Why we need a strategic plan .........................................13
How we produced the strategic plan .............................16
The strategic plan ..............................................................22
How much will it cost? ....................................................25
Controlling the strategic plan ..........................................28
Lessons for the future .......................................................31
Appendices ........................................................................33
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Figure 1: Organisational structure ..................................11Figure 2: Strategic framework .........................................14
Table 1: The committees ...................................................12Table 2: Management committees ..................................12Table 3: Budget for the five-year period 2007-2012 ......27Table 4: Economic assumptions ......................................64Table 5: Historic electricity sales volume ......................64Table 6: Electricity sales volume forecast ......................65Table 7: Petroleum sales forecast ....................................65Table 8: Occupancy and office services ..........................66
FIGURES AND TABLES
Table 9: Consultancy and other services ......................66Table 10: HIV/AIDS programme ..................................67Table 11: Breakdown of the proposed strategic planning activities .............................................................67Table 12: Proposed strategic planning activitiesmapped into relevant line items ....................................68Table 13: Strategic planning activities not coveredby the five-year budget ....................................................68Table 14: Additional funding requirements forthe proposed strategic planning activities ....................69Table 15: Capital expenditure items ...............................69
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Abbreviation MeaningAG Attorney GeneralKNBS Kenya National Bureau of StatisticsDG Director GeneralDOHS Department of Occupational Health and SafetyEHS Environment, Health and SafetyERB Electricity Regulatory BoardERC Energy Regulatory CommissionERP Enterprise Resource PlanningHR Human ResourcesICT/IT Information Communication TechnologyIDA International Development AssociationKEBS Kenya Bureau of StandardsKFS Kenya Forestry ServicesKIPPRA Kenya Institute for Public Policy Research and AnalysisKPC Kenya Pipeline CompanyKPRL Kenya Petroleum Refineries LimitedKWh Kilowatt Hour
Abbreviation MeaningLNG Liquefied Natural GasLPG Liquefied Petroleum GasM&E Monitoring and EvaluationMIS Management Information SystemMoE Ministry of EnergyMoU Memorandum of UnderstandingMPC Monopolies and Prices CommissionNEMA National Environmental Management AuthorityNOCK National Oil Company KenyaOFT Office of Fair TradingOPAC Online Public Access CataloguePPA Power Purchase AgreementPR Public RelationsRBM Results Based ManagementREA Rural Electrification AuthorityRRI Rapid Results InitiativesUK United Kingdom
ABBREVIATIONS
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Term DefinitionCore values The fundamental rules by which the ERC wants to conduct
business Goal High level statements of what needs to happen to achieve a KRA Key Result Area
The areas on which the ERC will focus in order to achieve results
Mission The purpose for which the ERC or department exists based on the circular on organization of government, statutes of Parliament and mandate
Milestone Review
Point in time that the ERC has predetermined to review achievements against strategy and review the underlying strategy associated with the bigger strategy
Outcome Business/departmental strategies employed to actualise set objectives against which external feedback is sought
Outputs The product or service that the ERC produces as part of the internal process
DEFINITIONS OF TERMS
Term DefinitionPerformance Indicator
The measure used to assess the performance of the ERC or department in service delivery
Situation Analysis
The critical assessment of the environment in which the ERC operates. It contains four elements: external influences and trends; government agenda, strengths and weaknesses; and challenges
Strategic Objectives
Broad, long-term targets designed to achieve the organisation’s mission. Ideally they are time bound, measurable and outcome oriented
Strategy Method, major actions and/or procedure for achieving the strategic objectives
Vision A vibrant and compelling image of the desired future state of the organisation
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FROM THE CHAIRMAN
This strategic plan, produced after considerable consultation and teamwork, aims to guide the operations of the ERC from 2008 until 2012. It is noteworthy that the ERC pragmatically revised this plan to realign it with the country’s economic development blue print, Vision 2030, and its five-year medium term plan for the sector.
Vision 2030 has been adopted by the Government of Kenya to act as the country’s economic development agenda for the period 2008-2030. To achieve this development agenda and meaningful economic growth, Vision 2030 has identified quality, reliable and affordable energy services as critical infrastructure drivers. In order to catalyze this economic and social development, the energy sector therefore, will need to be managed and regulated in line with international best practices for modern economies. The role of the ERC will to be to ensure energy resources are prudently managed with a view to guaranteeing quality, cost effective, affordable and reliable energy services to power Vision 2030. In executing this important statutory mandate, the ERC has identified five strategic objectives to be of eminent focus during the defined strategy period, namely: to protect the interests of energy users by ensuring that demand is met with reliable, cost effective and high quality energy services in an environmentally friendly manner; to protect the interests of consumers, investors and other stakeholders; to influence, advise on and implement government policy in order to meet the statutory objects and functions set for the ERC; to be at the forefront of planning, research, preservation and dissemination of energy sector data, information and best practice; and to strengthen the ERC’s institutional capacity to discharge its functions.
It is my fervent commitment to lead the ERC in implementing this strategic plan for the benefit of this great country and I call upon all ERC staff members to redouble their efforts, to ensure that our strategic objectives are pursued with utmost vigour.
Finally, I thank sincerely all who were involved in producing this strategic plan, for their dedication and commitment.
Mr. Hindpal S JabbalChairman
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FROM THE DIRECTOR GENERAL
This five year Strategic Plan (2008-2012) is the outcome of a long and consultative process that constructively engaged both internal and external stakeholders. Each individual and collective contribution to the plan development process greatly enriched it and I sincerely thank all those who played a part in its preparation.
In the process of developing it, the ERC carefully evaluated its strengths and weaknesses, reviewed the challenges it faces and developed well thought out strategies to deal with these challenges on a sustainable basis, now and in the future. This plan therefore, is a clear strategic road map that will guide the operations of the ERC and harness synergies between the ERC and other players in the energy sector in furtherance of the economic priorities of the country.
To actualise the new vision and mission statements of the ERC, the strategic plan has translated its five strategic objectives into a purposeful, actionable and time-bound results matrix that obligates departments, units and individual staff members of the ERC to play a proactive role in implementing the plan.
The results matrix will form the basis for negotiating performance targets for the ERC with the government, cascaded to individual departments and officers. In addition, the annual staff appraisal system will be based on these performance targets in order to ensure that performance obligations defined in this plan are continually evaluated.
On my part, as the administrative head of the organisation, I give my solemn commitment to provide dedicated leadership in the implementation of the plan and further commit to mobilise requisite financial and human resources to ensure that the strategic objectives identified in this plan are implemented according to plan.
Eng. Kaburu MwirichiaDirector General
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The Energy Regulatory Commission (ERC) was established under the Energy Act, 2006 to expand the mandate of its predecessor, the Electricity Regulatory Board (ERB) which had been implementing its 2004-2008 strategic plan in line with the 9th National Development Plan (2002-2008) and the Economic Recovery Strategy for Wealth and Employment Creation 2003-07 (ERS/ERSWEC).
This first ERC five-year strategic plan (2008-2012) draws from the experience of the ERB strategic plan taking into account recent developments in the energy sector locally and globally. In addition, this current strategic plan has been revised to align it with Vision 2030, which is guiding Kenya’s development agenda from 2008 to 2030, and its medium term plan.
Vision 2030 aspires to build on the economic growth generated by the successful implementation of the ERS and propel the country’s economic performance to a sustained GDP growth rate of at least 10% per annum over the next decade, transforming the country from a low income, agricultural economy to a middle income economy with a robust manufacturing base and a large service sector.
Vision 2030 and its medium term infrastructure plan have identified quality, cost effective, affordable and reliable energy services as critical drivers towards achieving the economic and social pillars identified in the vision. In particular, flagship projects and programmes in the energy sector must be implemented on time, according to plan and within budget, to realise the growth aspirations of the economy.
An important statutory mandate of the ERC is to regulate the energy sector in a fair, transparent and predictable manner, which will spur sectoral growth and investment by guaranteeing quality service standards to energy consumers. The ERC strategic plan therefore charts a broad roadmap for efficient energy services for consumers over the next five years, promoting economic growth and development as espoused in Vision 2030 and its medium term plan.
This strategic plan was developed after a series of consultative processes involving ERC senior management and other stakeholders. In particular a strategic planning working session for ERC managers was held in August 2007 to assess the ERC’s current situation and agree on a road map that would pave the way for the final strategic plan. The organisation’s vision, mission and core values were also developed. These are:
Vision: To be a world class energy sector regulator that facilitates and enhances delivery of sustainable, quality and robust energy services.
Mission: To regulate the energy sector in a fair, transparent and predictable manner.
EXECUTIVE SUMMARY
Core Values: • Professionalism• Predictability• Integrity• Responsiveness• Teamwork
• Transparency• Accountability• Independence
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The ERC faces a number of challenges emanating from the internal and external environments. These include: a weak electricity/petroleum supply and distribution infrastructure; an inadequate legal and regulatory framework; lack of security of tenure for commissioners; high expectations from stakeholders; excessive commercial power of the regulated entities and information skewed in their favour; resistance to change and inadequate team spirit; and limited management information systems. However, through various strategies, the ERC is mitigating the risks posed by these challenges and has identified a set of values and key result areas (KRAs) to guide its operations during and beyond the strategic plan period.
The ERC is focusing on five strategic objectives during the strategy period, broken down into detailed action plans, which include activities, resource requirements, timeframes and responsibilities for the delivery of each strategy.
• To protect the interests of energy users by ensuring that demand is met with reliable, cost effective and high quality energy services in an environmentally friendly manner.
• To protect the interests of consumers, investors and other stakeholders.
• To influence, advise on and implement government policy in order to meet the statutory objects and functions set for the ERC.
• To be at the forefront of planning, research, preservation and dissemination of energy sector data, information and best practice.
• To strengthen the ERC’s institutional capacity to discharge its functions.
The cost of implementing the plan over the five-year period is approximately Ksh 1.7 billion and the main sources of revenue for the ERC are the electricity and petroleum levies, projected to generate about Ksh 1.1 billion over the plan period. The apparent revenue deficit will be covered from retained surpluses from previous accounting periods, while in the medium term, the ERC will seek government assistance in securing stakeholder and partner support.
The success of the plan’s implementation largely depends on how activities and outputs are effectively monitored and evaluated. The planning committee is overseeing the plan’s implementation and reviews the quarterly progress reports submitted by heads of department.
Energy saving light bulbs use a quarter of the electricity of an ordinary bulb and last eight times as long
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Renewable energy The renewable energy department, which comprises licensing and compliance and energy efficiency, formulates, reviews and monitors regulations and codes for the renewable energy sector and is responsible for renewable energy planning.
Economic regulation The economic regulation department monitors the implementation of, and compliance with principles of fair play in the energy sector in coordination with other statutory authorities. It sets fair tariffs for consumers while ensuring that investors are adequately compensated, develops indicative energy plans and researches, develops and promotes competition in the energy sector.
Legal affairs The legal affairs department provides secretarial services to the ERC, manages all legal matters, negotiates contracts, develops regulations and ensures that the ERC complies with the various statutes and regulations governing its operations. In addition, the department continually reviews and recommends relevant changes to legislation. It also provides guidance and recommendations on investigations and enforcement with regard to regulated sectors. Procurement The procurement department is responsible for supply chain management and supports activities across the organisation in an effective and efficient manner.
Finance and strategic planning The finance and strategic planning department provides financial management and advice to the ERC, spearheads strategic planning and performance contracting processes and provides regular updates on how the ERC is performing, using key performance indicators.
Information and communication technology (ICT) The ICT section falls under finance and strategic planning and is responsible for systems and network administration, hardware and software maintenance and providing ICT technical support services across the organisation.
Organisation of the ERCThe ERC’s structure is designed around the regulation of industry sub-sectors. This structure enables the ERC to fulfill its mandate and clearly defines ownership, planning and implementation roles.
The policy leadership of the ERC is vested with commissioners, specifically: the chairman, the permanent secretary Ministry of Energy, the director general, and five other commissioners appointed by the minister. The director general is the chief executive officer with overall responsibility for the organisation.
The ERC’s organisation structure is arranged according to the core outputs, with support departments and units providing ancillary services. Departments consist of: electricity, petroleum, renewable energy, economic regulation, legal affairs, procurement, finance and strategic planning, information and communication technology, human resources and administration, communications and public affairs and internal audit.
Electricity The electricity department, which comprises power systems and consumer affairs, reviews and advises on government policy on the electricity sub-sector; prepares strategic and operational plans; licenses utilities; regulates electrical installation work including licensing of electricians and registration of electrical contractors; reviews power purchase agreements and network service contracts; develops and enforces regulations, standards and licence conditions; collects and maintains information relating to the technical regulation of the electricity sub-sector; plans generation and transmission expansion; and investigates complaints and disputes.
Petroleum The petroleum department implements government policy governing the petroleum sector with a focus on licensing; it issues construction permits, develops standards for the petroleum sector and plans petroleum supply and distribution infrastructure. It also takes the lead in formulating, reviewing and enforcing regulations and codes for the petroleum sector, and environmental, health and safety (EHS) requirements for the energy sector as a whole.
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Human resources and administration The human resources (HR) and administration department builds the organisation’s capacity, and develops, implements and reviews the ERC’s HR strategy for attraction, development and retention of talent. The department also provides guidance on target setting and performance monitoring, and manages the ERC’s succession planning in line with the ERC’s strategic objectives.
Communications and public affairsThe communications and public affairs department ensures that the ERC has visibility, impact and engagement with key audiences through the development of a resource
centre and effective external communication strategies. In collaboration with the other departments, it ensures that all staff has a reliable knowledge centre and access to the latest research, developments and publications on the energy sector.
Internal audit The internal audit section identifies potential risk areas and recommends improvements to risk management and internal controls; it conducts risk and quality assessments to reduce risk exposure and improve the ERC’s operational efficiency.
Manager Procurement
Senior Manager, HR & AdministrationSenior Manager,
Communication & Public AffairsSenior Manager,
Finance & Strategic Planning
DirectorPetroleum
DirectorElectricity
DirectorRenewable Energy
DirectorEconomic Regulation
Commission Secretary(Director Legal Affairs)
Internal Auditor
The Commission
Director General
Figure 1: Organisational structure
ENERGY REGULATORY COMMISSION: ORGANISATIONAL STRUCTURE
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Governance Commissioners
The commissioners provide guidance and policy oversight to the management in the running of ERC affairs through sub-committees as shown in Table 1.
Table 1: The committees
Sub–committee FunctionTechnical Technical mattersAudit Audit and risk managementFinance and administration
Finance, human resources, administration, communication and ICT
Management
The director general is the chief executive of the ERC and is responsible for its day-to-day management. He is supported by various committees as shown in Table 2.
Table 2: Management committees
The committee FunctionsSenior management Comprises all heads of department under the
leadership of the director general. Oversees day-to-day operations of the ERC
Petroleum licensing Evaluates and approves licence applications by petroleum dealers
Electricians and electrical contractors licensing panel
Evaluates and approves licence applications by electricians and contractors
Tenders Responsible for ERC procurement in accordance with the Public Procurement and Disposal Act 2005
Procurement Responsible for approving tenders below Ksh 500,000 in accordance with the Public Procurement and Disposal Act 2005
Inspection and acceptance Inspects goods, services or works undertaken by the commission in accordance with thePublic Procurement and Disposal Act 2005
Planning Oversees strategic planning, implementation, monitoring and evaluation
ISO 9001:2008 Project implementation team
Oversees implementation of ISO 9001:2008 QMS project
Least cost power development
Oversees least cost power development planning
Lighting an empty office overnight wastes enough energy to heat water for 1000 cups of coffee
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The rationale Strategic planning is one of the key building blocks in the institutionalisation of results based management (RBM), used by Government of Kenya public servants as the mechanism of efficient service delivery to Kenyans. Performance contracts, the development of service charters and the implementation of rapid results initiatives (RRI) are the foremost initiatives of RBM, and are all based on institutional strategic plans, thus making the strategic plan one of the most important management tools in modern public service. As such, it is expected to be a living document that all staff in the ERC will use to plan their day-to-day activities
How does the strategy work?
As illustrated below, the strategy drives the resources required, the activities that ERC will undertake using these resources, the way these activities are grouped into an organisation design, and ultimately the management and measurement of ERC performance.
The institutional frameworkThe Energy Regulatory Commission (ERC) was established under the Energy Act 2006 to expand the mandate of its predecessor, the Electricity Regulatory Board (ERB) which was in the process of implementing its 2004-2008 strategic plan in line with the 9th National Development Plan (2002-2008) and the Economic Recovery Strategy for Wealth and Employment Creation 2003-07 (ERS). The ERC five-year strategic plan therefore draws from the experience of the ERB strategic plan, taking into account the recent developments in the energy sector locally and globally.
The Sessional Paper No. 4 of 2004 on energy laid the policy framework upon which sustainable, cost-effective, affordable, adequate and quality energy services are made available to the domestic economy until 2023. The agenda included a new and robust Energy Act, which, among other things, would create a common energy sector regulator, the Energy Regulatory Commission, as a successor to the ERB. The Energy Act was passed in 2006 and consolidated the Electric Power Act No. 11 of 1997 and the Petroleum Act Cap. 116.
The following are the main functions and objectives of the ERC as set out in section 5 of the Energy Act 2006:
• To regulate: o the import, export, generation, transmission, distribution, supply and
use of electrical energy;o the import, export, transport, refining, storage and sale of petroleum
and petroleum products;o the production, distribution, supply and use of renewable and other
forms of energy.• To protect the interests of consumer, investor and other stakeholder interests.• To maintain a list of accredited energy auditors as may be prescribed.• To monitor, implement, and observe the principles of fair competition in the
energy sector, in coordination with other statutory authorities.• To provide required information and statistics to the minister. • To collect and maintain energy data.• To prepare an indicative national energy plan.• To perform any other function that is incidental or consequential to its functions
under the Energy Act or any other written law.
StrategyOrganisation
External Environment
Performanceand
Rewards
Activities /Resources
Figure 2: Strategic framework
The strategy takes into account the internal and external environment within which the ERC operates and which impacts on its performance. Getting the strategy right is therefore critical to the ERC’s success.
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Performance level
Performance information provided by the ERC forms the foundation against which future performance can be evaluated. The performance level of the key outputs is summarised below.
Electricity The ERC ensures that licensees comply with applicable technical, environmental and safety requirements, while at the same time facilitating the provision of quality electricity supplies. The ERC shall continue to issue licences and permits for electricity undertakings, as well as to license electricians and register electrical contractors on a need basis, and resolve complaints and disputes in the electricity sub-sector.
Economic regulation The ERC protects the rights of energy consumers with respect to prices and tariffs charged for regulated services. It sets and reviews retail electricity tariffs, and oversees the downstream petroleum market with a view to fostering competition in the petroleum sub-sector. The ERC also collaborates with the Minister for Energy in the regulation of the renewable energy sub-sector.
PetroleumThe ERC streamlines licensing procedures and issues construction permits for downstream petroleum activities to ensure transparency, equity and speed. A major objective is to formulate and gazette comprehensive petroleum regulations under the
Energy Act. It also inspects and enforces compliance with licensing conditions and expedites resolutions to disputes and complaints related to the petroleum industry.
Enforcement of license conditions and regulationThe ERC issues licenses with specific conditions that define the way licensees are expected to operate while ensuring standards are maintained. It ensures conformity to licensing conditions through continuous field visits, inspections and testing and independently makes recommendations and follow-ups. Environmental health and safety (EHS) The ERC is responsible for monitoring and enforcing EHS standards for the sector and conducts EHS audits of electricity utilities and petroleum facilities.
Coordination with other authorities and stakeholders The ERC endeavours to coordinate with other statutory authorities and stakeholders to enhance and streamline its operation by:• setting, enforcing and reviewing standards• granting and reviewing licenses• monitoring, ensuring implementation of, and observing the principles of
fair competition in the energy sector, in coordination with other statutory authorities
• developing energy sector data bases• undertaking energy planning.
Nuclear energy provides about 15 percent of the world’s electricity
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HOW WE PRODUCED THE STRATEGIC PLAN
©Steve Forrest/Panos
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The methodology This strategic plan was developed through an approach and methodology that would ensure ownership, commitment and leadership by the ERC staff. In developing this strategy, a structured and phased approach was adopted involving the following milestones:
• Undertaking a detailed situation analysis through face to face discussions with co-workers, seeking views and opinions of key components that define and support the business operations and document review.
• Presenting and refining the results of these discussions during working sessions in August 2007, with selected ERC senior management.
• Developing a draft set of strategic objectives from the working sessions that broadly defined the proposed strategic direction of the ERC on which this strategic plan is based.
• Setting up a strategic planning committee comprising heads of departments to prepare the first draft of the strategic plan, using materials and outputs from the working sessions. This committee’s role included refining the strategic plan and developing action plans with defined timelines and responsibilities.
• Convening a working session for the team in November 2007 to develop detailed work plans and budgets to support the strategic objectives.
• Presenting the draft strategic plan to the commissioners in December 2007 and incorporating their comments into this final strategy report. The final strategic plan became effective 31 July 2008, when it was approved by the commissioners of the ERC.
The strategic plan was prepared under the leadership of the director general and in coordination with various heads of department. PricewaterhouseCoopers, an external consultant, facilitated the process, which was designed to engage the ERC in identifying the strategic issues it faces and the necessary initiatives to make it better aligned to its role. Most members of the ERC devoted considerable effort to the process and demonstrated enthusiasm, ownership of, and commitment to implementing the plan.
The initiatives set out in this plan will be translated into action, which will, in turn, carry along those who may not have participated in its preparation.
This comprehensive first five-year strategic plan has been revised to align it with the medium term plan of Vision 2030 and the Sessional Paper No. 4 on energy.
Situation analysis and capability assessmentThe situation analysis and capability assessment was conducted using a SWOT (strengths, weaknesses, opportunities, threats) analysis in the context of the government agenda, and the external and internal environments.
Government agenda
The Government of Kenya recently launched a long term economic blue print, Vision 2030, to guide the country’s development agenda for the period 2008 to 2030. Vision 2030 is the economic planning and development successor to the seven-year Economic Recovery Strategy for Wealth and Employment Creation (ERS) that lapsed in 2007. It aspires to build on the economic growth generated by the implementation of the ERS and propel the country’s economic performance to a sustained growth rate of at least 10% per annum over the next decade, transforming the country from a low income, agricultural economy to a middle income economy with a robust manufacturing base and large service sector.
Vision 2030 and its medium term infrastructure plan have identified quality, cost effective, affordable and reliable energy services as critical drivers towards achieving the economic and social pillars shown in the vision. In particular, flagship projects and programmes in the energy sector must be implemented on time, according to plan and within budget, to realise the growth aspirations of the economy.
To meet these expectations and anchor the growth targets of Vision 2030, the energy sector must be managed prudently and regulated in an efficient and effective way to ensure that investments in the sector and project turn-around are at a pace consistent with growing energy demand. These are obligations within the broader regulatory purview of the ERC.
Challenges identified in Vision 2030
• A weak power transmission and distribution infrastructure.• The high cost of power, low per capita power consumption and low countrywide
access. • The petroleum industry is constrained by limited supply facilities for fuels
including LPG (liquid petroleum gas).• Domestic production of motor fuels which do not meet international quality
standards.• Inadequate distribution in remote parts of the country contributing to high
product prices.
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• Proliferation of substandard fuel dispensing facilities.• Under-dispensing of products, including adulteration of motor fuels, and
dumping of export products.
Response
The ERC strategic plan charts a broad roadmap through which efficient energy services will be provided to consumers over the next five years with a view to promoting economic growth and development espoused in Vision 2030. Specific measures (see the implementation matrix) will be taken to monitor the power sub-sector transmission and distribution networks, to plan for investments in the power sector on the basis of least cost criteria, to regulate tariffs and tariff structures, and to encourage nationwide electricity access. In the petroleum and renewable energy sub-sectors, the ERC will improve installation and facility inspections, formulate and review rules, standards and codes, and enforce compliance to licensing conditions.
The external environment
The analysis of the external environment focused on the political, legal, economic, social, cultural and technological factors that impact on the performance of the ERC. A review of these factors identified the opportunities and threats that the ERC needed to take into account as part of the strategy.
Political and legal
Opportunities • The ERC enjoys political goodwill and enormous support from the Ministry
of Energy due to the significance of the energy sector in achieving Vision 2030.
• Legislation governs the sector and the ERC’s mandate through an Act of Parliament. However, areas of improvement have been identified, to be addressed through the ERC’s legal affairs department as it participates in the process of drawing up bills and regulations. This provides an opportunity for the ERC to ensure that the review of the legal framework removes conflicts and is in line with good sector practices.
• Government regulations regarding performance contracts, ICT policy, budgeting processes and the Public Officers Ethics Act avail the opportunity to reinforce good corporate governance within the ERC.
Threats• Perceptions of political interference arising from historical factors as well as the
current governance framework undermine the ERC’s image as an independent regulator. This is compounded by the untimely change of commissioners.
• Government bureaucracy: the ERC is a state corporation, and some of its performance processes have to comply with lengthy government regulations while others involve seeking specific government approval.
• Overlap in some of the mandates may put the government and some state corporations in a competitive and antagonistic situation with the ERC.
• Some of the ERC mandate opens it up to the possibility of being drawn into protracted and costly court processes.
• High public expectations and limited public knowledge of the functions pose the threat of pressure to act in politically correct way.
Economic
Opportunities• The vibrant economy in recent years has led to an increased demand for energy
services. In spite of the shock to the economy arising from the recent global recession, it is anticipated that, in the medium to long-term, economic activity will pick up significantly to provide a conducive environment for the ERC to realise its strategic revenue goals.
Threats• Driven by the robust performance of the economy, the demand for energy is
rapidly outpacing supply. The ERC will therefore play its role in enhancing the investment climate in order to attract more players to the energy sector.
• The quality of service offered by utilities and sector operators still lags behind global standards. The ERC will therefore intensify compliance and enforcement measures to safeguard quality energy services to consumers.
• Information asymmetry between the regulator and regulated entities gives undue advantage to the utilities. The ERC will intensify compliance and enforcement measures, and put in place innovative approaches to ensure cost effective and quality service delivery.
• There is a general perception that some liberalised segments of the energy sector engage in uncompetitive conduct. The ERC will therefore intensify its competition monitoring and enforcement activities in collaboration with other entities with a similar mandate.
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• The ERC’s income is directly dependent on the quantity of energy products consumed. This in turn depends on the performance of the economy and the sector. The ERC will therefore endeavour to build up revenue reserves during good times to cushion it against periods of economic downturn.
Socio-cultural
Opportunities• An increasingly enlightened society, a supportive public, and improved literacy
levels have contributed to increased demand and consumption for quality and affordable energy.
• The media has been instrumental in highlighting unethical and cartel-like behaviour among some of the energy sector players. The ERC will continue to use the media to educate the public on its rights and the ability of the ERC to assist in resolution of complaints.
Threats• Kenyan consumers are often impatient and may not be ready to give the ERC
time to put its systems and structures in place. The management will expedite implementation of the approved structure to make the ERC better able to protect the public interest.
• Although the ERC will offer dispute resolution services to the public, poverty levels and a culture of forbearance may limit the public’s ability to seek dispute resolution services from the ERC.
Technological
Opportunities• Increased use of new power-based technologies assures sustained demand for
affordable energy both for domestic and industrial use. In turn, the demand will make the sector attractive to potential investors.
• Modern technology will ensure increased efficiency and safety in energy consumption and the ERC can take advantage of this technology to create more efficient systems and processes.
Threats• Cyber crime and other technological malpractices make rural communities
slower in accepting electricity energy, as the perceived benefit is exceeded by the perceived losses.
ResponseThe ERC will carry out a review of the current legal and policy framework to make it more supportive to convergence, competition, investment and other dynamic changes in the sector. Proposals will be forwarded to the Ministry of Energy. The ERC will also work with relevant authorities such as the parent ministry, the National Environment Authority (NEMA) and Parliament to win support for a new legal framework. It will develop procedures for compliance and enforcement to licence conditions, support negotiations and drafting of service level agreements (SLAs), and monitor and verify compliance returns. In addition, the ERC will carry out annual customer satisfaction surveys, benchmark with other regulators for improvement and put in place a customer feedback mechanism. Finally, the ERC will develop and disseminate information and undertake consumer education outreach activities, including using the media, to ensure optimal quality of service to licensees and end-users.
The internal environmentThe review of the internal environment focused on key organisational components – leadership, organisational structure, systems and processes, people and resources and culture and values - to identify the strengths and weaknesses facing the ERC.
Leadership
Strengths• ERC leaders have appropriate academic and professional qualifications at
all levels, as well as sector experience, and are well equipped to provide the required leadership to propel the sector to high levels of service delivery.
• The leadership is open minded, dynamic, flexible and innovative, alert to rapid changes in the energy sector and able to respond appropriately.
• The leadership is results-focused, using performance reviews to ensure that the ERC does not deviate from set targets.
Weaknesses• Leadership at management level is sometimes perceived to be too liberal,
lacking sufficient team spirit and not focused on strategic issues, but rather dwelling on operational matters.
• The leadership still carries the historical baggage of being susceptible to political interference given that the government appoints the commissioners and the director general. Possible vested interests and lack of security of tenure for the top positions enhance the perception of lack of independence.
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Organisational structure
Strengths• The approved structure is aligned to the strategy and dynamic enough to allow
a rapid response to emerging trends and related HR development.• The current structure has engendered a results-oriented management culture
where departments are held accountable for specific results.
Weaknesses• Even though the structure is strategy-aligned, it is flat and wide with a wide
span of control at the top.• Some functions are perceived to be under-staffed affecting their ability to
deliver.
People and resources
Strengths• Competent and qualified personnel able to keep up with rapid sectoral changes
and to engage with the various actors.• Multi-skilled staff equipped with the necessary tools to deliver. • Needs-based recruitment with a training programme that provides staff with
opportunities for development and exposure to best practices.
Weaknesses• An expanded mandate means that the ERC has to address the staffing needs of
new functions such as the petroleum and renewable energy regulation.• Projected finances are inadequate to meet the ERC’s medium term budget
requirement. The ERC will seek the assistance of the government, the World Bank and other partners/stakeholders to address the projected shortfall.
• There is sometimes inadequate cooperation among the staff, exacerbated further by poor internal communication.
• Office space and management information systems need to be addressed urgently if employees are to be more productive at work and vacant positions to be filled.
Systems and processes
Strengths• The ISO certification that is underway is expected to result in considerable
improvements in systems.
• Various studies (such as MIS) have now been implemented.• The existing rules, combined with the introduction of performance contracting
and performance management, have resulted in considerable improved performance. However these need to be strengthened and sustained throughout the strategic plan period.
Weaknesses• ERC systems and processes in all areas of operation are inadequate and need
to be worked on. For example, some are designed to operate alone and are not adequately integrated with other systems, leading to inefficiencies in service delivery.
• Some security challenges exist based on the level of automation, especially for on-line systems.
• In some instances there is a lack of adherence to established systems and procedures.
Culture and values
Strengths• High compliance with corporate values and governance.• A flexible organisation able to respond to a rapidly changing environment.
Weaknesses• Resistance to change by some co-workers.• Inadequate team spirit.• Occasional poor time management.• Lack of adequate communication strategies with clients.
ResponseThe leadership will take a greater role in sharing the strategy, clarifying and promoting the mission, vision and values, and inspiring the organisation to rally behind the strategy to deliver exceptional results. Internal communication and information sharing will be revitalised across all departments so that co-workers can participate in strategy implementation and an internal communications policy and intranet will be developed and fortnightly management meetings will be held. Events and meetings will become internal communication tools. The strategy will be published on the web and regular stakeholder forums will take place to promote it among industry stakeholders.
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The ERC will also recruit and retain a highly skilled workforce and promote capacity building in the energy sector by, among other things, implementing needs-based training, career and succession planning and job enrichment, and collaborating with bilateral donors and other bodies in bridging the energy regulation know-how and financial resources. Priority will be given to creating a motivated and flexible workforce by ensuring that internal communication channels are effective, reviewing health, safety and environmental protocols and carrying out staff retraining. The staff reward scheme will be redesigned as a better motivational tool.
To address the financing shortfall, the ERC will, in the medium term, seek government assistance to secure stakeholder and development partner support for planned strategic studies and development activities. Finally, to ensure the efficiency of support systems and procedures, the ERC will computerise all departments, ensure adherence to procedures and statutory requirements, implement those procedures approved through ISO certification and ensure continuous improvement on ISO standards.
Summary of challenges facing the ERC• Inadequate power transmission and distribution infrastructure, high cost
of power, low per capita power consumption, and low countrywide access, contributing to high product prices, a proliferation of substandard fuel dispensing facilities, under-dispensing of products (including adulteration of motor fuels) and dumping of export products.
• Limited supply facilities for fuels including LPG, and domestic production of motor vehicle fuels that do not meet international quality standards.
• Overlap and conflict in some of the mandates and legislation.• High public expectations and limited public knowledge of the functions of the
ERC.• Lack of effective competition in the energy sector. • Lack of security of tenure for the top leadership, enhancing a perception of lack
of independence.• An expanded mandate resulting in a capacity challenge.• Inadequate systems and process in all areas of operation.• Resistance to change.
Geothermal steam and hot springs have been used for centuries for bathing and heating, but it was not until the 20th century that geothermal
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THE STRATEGIC PLAN
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The strategy is informed by detailed research, consultations and information analysis to ensure a clear understanding of the ERC’s mandate, challenges and aspirations, the government agenda, and the operational environment. It will guide ERC operations, facilitating and regulating Kenya’s energy sector, for the next five years. It is a live document and will be revised as the environment changes and as new factors come into play.
Linking the strategic plan with Vision 2030 Vision 2030 and its medium term plan identified efficient infrastructure services as critical to driving the social economic agenda of Kenya in the coming decades. This is underpinned by the close positive correlation between efficient infrastructure services and a country’s economic performance.
Commercial energy supply is closely correlated to performance of the gross domestic product (GDP). Kenya’s good economic performance in 2003-04 and 2007-08 financial years generated a strong momentum in the growth in electricity demand over the same period. As the country gears towards attaining the sustainable economic growth rate of 10% per annum by 2012/13 projected in Vision 2030, energy sector players must realign their strategic goals and objectives to support this growth strategy. In particular, the envisaged economic growth will require large energy supplies delivered efficiently and at competitive prices to end-users.
The ERC has a statutory mandate to guarantee the provision of quality, reliable and cost effective energy while protecting the environment. It is in this context that the ERC’s strategic goals have been developed. Over the life cycle of Vision 2030 and the successive five-year medium term plan, the ERC will endeavour to provide a conducive, predictable and attractive regulatory environment for energy sector investments, at a pace consistent with rising energy demand.
Our Vision To be a world class energy sector regulator that facilitates and enhances delivery of sustainable, quality and robust energy services.
Taking cognizance of the mission, the vision foresees a situation where the work of the ERC enables all stakeholders within the sector to collaborate in providing a wide range of energy services in Kenya. The vision of the ERC sets outs its future desired state and will guide this strategic plan.
Our MissionTo regulate the energy sector in a fair, transparent and predictable manner.
Within this mission statement, the core role played by the ERC is to regulate the energy sector in a fair, transparent and predictable manner. It will serve to focus ERC co-workers, as well as provide clarity to all stakeholders, on the ERC’s core function. Furthermore, individual missions statements have been developed in respect of the sub-sectors regulated by the ERC.
Electric power To ensure delivery of reliable and cost effective electricity supplies to all, by enhancing the effectiveness of the regulation of the electric power sub-sector.
Petroleum To regulate the petroleum sub-sector in a cost-effective manner in order to deliver a competitive, safe and environmentally friendly industry.
Renewable energy and energy efficiencyTo support and regulate renewable energy supplies and increased energy efficiency for environmental benefit.
Corporate servicesTo provide efficient, effective and timely support to ERC operations.
Our Values To align the mission and vision and to equip the ERC with the means to overcome the challenges it faces now and in the future, there is a need for a visible transformation by all involved, guided by a set of core values that will form the standards of behaviour for the ERC. Every co-worker, together with stakeholders who engage with the ERC, will be expected to internalise and support these values.
Professionalism The ERC will uphold high standards of professionalism, and all members of the board of commissioners and professional staff are expected to adhere to their codes of ethics.
Predictability The ERC will follow clearly defined rules and regulations in the delivery of its services.
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Integrity The ERC will ensure the highest levels of integrity in its work.
Responsiveness The ERC will endeavour to be sensitive and expeditious in dealing with stakeholders.
Teamwork The ERC will, at all times, embrace teamwork, mutual cooperation and appreciation of diverse perspectives, in the discharge of its functions.
TransparencyThe ERC will conduct its work at all times in a transparent manner, consulting widely and making information readily accessible internally and externally to stakeholders.
AccountabilityThe ERC will ensure the highest levels of accountability in its work.
Independence The ERC will ensure the highest levels of independence in its work.
Our Strategic Objectives
The strategic objectives for the ERC 2008-2012 are:
• To protect the interests of energy users by ensuring that demand is met with reliable, cost effective and high quality energy services in an environmentally friendly manner.
• To protect the interests of consumers, investors and other stakeholders.• To influence, advise on and implement government policy, to meet the ERC’s
statutory objectives and functions. • To be at the forefront of planning, research, preservation and dissemination of
energy sector data, information and best practice. • To strengthen the ERC’s institutional capacity to discharge its functions.
Implementing the strategies
Implementing departmental objectives and targets provides the process through which the strategies are achieved. Each department translates the strategic objectives into reality by taking responsibility for implementing the economic and technical regulation of electric power, renewable energy, downstream petroleum sub-sectors and corporate services.
The targets of the above objective are as indicated in Appendix A - (Results Matrix). The departments will use these matrices to develop annual work plans, which will in turn guide the development of the annual budget and performance contracts.
An average wind speed of 14mph is required to convert wind energy into electricity
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Annual budgets and proposed financing The World Bank Handbook for Evaluating Infrastructure Regulatory Systems states that funding should be primarily obtained from a levy on regulated entities and not from the general treasury. This helps to protect the independence of the regulator by making it less subject to budgetary pressures.
Entities should be able to pass on the costs of the levy to end customers. To reduce the scope for abuse and in the interests of equity, the levy should be based on the revenues of a regulated entity and not tied to profits.
The ERC will run a balanced budget over the medium term (3 to 5 years) allowing for temporary surpluses or deficits resulting from changing workloads and special projects. The ERC will be guided by the Government of Kenya accounting guidelines and reporting and review mechanisms.
The financial projections are based on the following assumptions on future levies:• The electricity levy to remain at 3 Kenya cents per kilowatt-hour [kWh]). It is
assumed that the ERC will collect 96% of this levy as per its historical financial statements.
• The petroleum levy has been gazetted by the Ministry of Energy at 5 Kenya cents per litre of premium motor spirit (super), regular motor spirit (regular), illuminating kerosene (IK) and industrial oil (IDO); and 4 Kenya cents per litre of automotive gas oil (AGO) with effect from 1 July 2008.
For 2007-08, it was assumed that 96% of the revenue was derived from the electricity levy while 4% was from other sources. However, for 2008-09, it was estimated that 58% of the revenues would be derived from the electricity levy, 41% from the petroleum levy and only 1% from other sources.
Donor and government funding
The financial projections presented in this section assume no funding from donors or from the government budget. They show the ERC’s financial position as dependent entirely on its own resources and identify the need for external funding. In practice the ERC will be able to access funds from external sources - particularly from development partners - to provide technical assistance for the strategic planning activities.
Currently, the ERC has received a commitment from the World Bank for the funding of the management information system and a review of proposed new and amended secondary legislation to implement its expanded mandate, which forms one of the strategic planning activities. Similar other funding commitments may be forthcoming for other activities.
The five-year budget The cost of implementing the strategic plan over the five-year period is approximately Ksh 1.7 billion. As stated above, the ERC has two main sources of revenue, namely the electricity levy and the petroleum levy, inadequate for the implementation of the identified strategies. For a detailed budget see Appendix B.
The following table provides the summarised budget forecast for the five-year period 2007/08 to 2011/12 based on the above assumptions. The detailed assumptions are available in Appendix B.
The significant jump in various budget items in 2009/10 and beyond is due to an anticipated increase in staff numbers, office space and level of activity. The forecasted budget shows deficits over the planning horizon before carrying out the additional strategic planning activities detailed in Appendix B of this report. These deficits will be covered from retained surpluses from previous accounting periods, while in the medium term the ERC will seek government support in securing stakeholder and development partner support to carry out the additional activities detailed in Appendix B (studies and development activities included in the strategic plan).
Switching off a typical fluorescent light for one hour in each working day will save 30kg of carbon dioxide emissions annually
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Description 2007/08Ksh (‘000s)
2008/09Ksh (‘000s)
2009/10Ksh (‘000s)
2010/11Ksh (‘000s)
2011/12Ksh (‘000s)
Income for the year Electricity levy 147,093 157,028 161,700 173,952 177,515Petroleum levy - 111,257 114,600 132,300 138,915Transfer from government 14,711 52,866 - - -Interest 7,028 8,928 1,750 1,750 1,750Miscellaneous 1,669 1,200 500 1,200 1,200Total income 170,501 331,279 278,550 309,202 319,380
Expenditure Capital expense for the year 241 52,128 69,250 12,000 -
Recurrent expenditure Commissioners’ expenses 26,333 22,073 26,207 28,642 30,517Personnel emoluments 58,747 68,730 128,884 141,773 155,950Training and other personnel costs 21,311 22,884 23,432 31,492 34,642Office supplies and expenses 3,563 3,672 4,020 4,686 5,154Transport and travel expenses 5,822 5,560 12,827 15,097 16,607Public relations/consumer services 7,619 22,680 25,000 34,570 38,027Telephone 1,758 1,506 3,336 3,636 3,936Information and communication technology related expenses
1,190 1,850 3,160 6,000 6,000
Occupancy and office services 5,954 6,314 20,060 25,000 27,500Consultancy and other services 9,269 85,366 23,300 45,653 50,219HIV/AIDS programmes - 1,005 1,410 2,432 2,675Sinking fund provision 8,467 10,000 10,000 10,000 10,000Contingency and other services 467 2,000 2,000 12,074 12,380Total expenditure for the year 150,741 305,768 352,886 373,055 393,607
BUDGET SURPLUS/ (DEFICIT) 19,760 25,511 (74,336) (63,853) (74,227)
Table 3: Budget for the five-year period 2007-2012
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CONTROLLING THE STRATEGIC PLAN
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Monitoring and evaluation
The ERC is aware that the success of the strategic plan depends on effective monitoring and evaluation of the activities and outputs. The planning committee is responsible for overseeing the implementation, reviewing the quarterly departmental implementation progress reports, and reporting to the ERC commissioners.
The strategic objectives will be monitored in the following way:
1. The strategy will be translated by the responsible officer into work plans and performance targets for their departments and evaluated on a quarterly basis.
2. Each responsible officer will extract the relevant targets and provide implementation reports on a quarterly basis.
3. The annual targets will be documented through annual performance contracts agreed by the ERC and the government and monitored through the performance contracting office.
4. A senior management meeting chaired by the director general will be held on a quarterly basis to review the progress report from the planning committee.
5. A mid-term implementation review will be undertaken and changes in the sector will be incorporated.
6. Specific issues will be identified and action plans prepared to address any challenges in the implementation of the strategic activities.
Monitoring indicators at ERC level
• Formulated regulations for electricity, petroleum and renewable energy sub-sectors
• Environmental, health and safety audit reports for regulated entities• Financial audit reports for regulated utilities• Issuance and/or renewal of licences for electric power generators• Issuance and/or renewal of licences for petroleum business operations• Interview reports for electrical contractors• Issuance of licences for electrical contractors• Resolution of consumer complaints• Electricity tariff reviews• Recruitment of additional staff• Appointment of licensing agents• Issuance of construction permits for petroleum installations• Formulation of programme prescribing the manner and timing of energy
audits
• Approval of power purchase agreements and network service contracts• Preparation of indicative energy plans• Collection and analysis of energy data• Capacity building for ERC staff and commissioners.
Monitoring indicators at national level
• Indicative national energy plans• Approval of power purchase agreements and network service contracts• Electricity tariff review• Amount of petroleum dumping and adulteration• Trends in petroleum prices• Resolution of consumer complaints.
Corporate objectives
An effective performance management framework needs to convert the vision and mission of an organisation into measurable corporate objectives. It should also identify and measure key performance drivers against these objectives. Together, these allow the organisation to identify its success against its objectives and the causes of weaknesses and threats in performance.
Based on the mission statements defined for each regulated sub-sector (in italics below), the proposed indicators are numbered below it.
Electricity To ensure delivery of reliable and cost effective electricity supplies to all, by enhancing the effectiveness of regulation of the electric power industry.
1. Electricity supply to all:• rate of electrification (i.e. proportion of households supplied with commercial
electricity). This is not fully under ERC control, as the REA will also influence the rate of electrification.
2. A cost effective electricity supply:• average cost of supply - measures success in reducing the costs of supply• average tariff divided by average cost of supply - measures the extent to
which tariffs recover costs• average residential tariff divided by average cost of supply to residential
customers - measures the extent of cross-subsidies to residential customers.
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3. A reliable electricity supply:• average frequency and duration of interruptions to supply.
Petroleum To regulate the petroleum industry in a cost-effective manner in order to deliver a competitive, safe and environmentally friendly industry.
1. Competitive industry • transparent licensing procedures • timely review of the licensing applications • effective regulation of common user infrastructure.
2. Safe industry • health and safety audit on petroleum facilities and enforcement of
compliance • investigation and reporting of hazardous incidents (such as fires and
spillages).
3. Environmentally friendly industry • environmental audit on petroleum facilities and enforcement of compliance• report on environmental incidents• transparent and timely licensing procedures.
4. Objective and clear criteria for inspection procedures
Renewable energy and energy efficiency To support and regulate renewable energy supplies and increased energy efficiency for environmental benefit.
1. Support and implement government policy on renewable energy supplies • formulate regulation on renewable energy.
2. Support for increased energy efficiency • number of energy audits performed • number of energy auditors registered with the ERC.
Corporate support To provide efficient, effective and timely support to the ERC’s operations.
1. Trained and motivated personnel 2. Adequate budgetary provision3. Availability of a business information system 4. Timely and cost effective procurement of goods, works and services5. Promotion of good corporate image 6. Adequate provision of administrative services7. Timely and reliable legal support services.
Biodiesel yields 93% more energy than the energy invested in its production
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LESSONS FOR THE FUTURE
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If there is one lesson that has emerged from the process of producing a strategic plan it is that the strategic planning process is as important as the final strategy. It was indeed challenging, and took a considerable amount of time and resources to complete. Yet it was also an excellent example of collaboration and cohesion, and serves as a great motivator for the staff as the organisation begins the process of achieving the strategic objectives.
Other equally significant lessons were learnt along the way, and we are happy to document these for the benefit of any organisation that may be preparing its strategic plan. Feel free to take note that:
• Teamwork is very important in the preparation and implementation of the strategy.
• The planning process enhanced cohesion and respect within the team and focused them on the implementation of the strategies.
• The consultative process employed in the preparation of the strategic plan ensured that the views of a wide range of stakeholders were taken into account.
• The process served as an eye-opener for the staff, clarifying the core purpose of the ERC as an energy regulator.
• The process enabled the team to view the ERC at corporate level, producing a bird’s-eye view of ERC operations and its contribution to the national economy. In this way, the process enhanced the participants’ strategic perspective.
• The process of producing the mission statement led to greater understanding of the organisation.
• The process of strategic planning involves many co-workers, and thus enhances ownership of the plan.
• The greater involvement by the staff has ensured a common understanding of each participant’s specific role and those of others.
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Appendix A. Results MatrixThe tables below describe the major actions in each goal, including timelines and budgets.
Objective 1
To protect the interests of energy users by ensuring that demand is met with reliable, cost effective and high quality energy services in an environmentally friendly manner
OUTCOME (Strategies) OUTCOME INDICATOR
OUTPUT (Activities) Output Indicator Unit Responsibility Baseline Year
&Value 2007/08
Target Year
1 2 3 4 5
Formulate, enforce and review environmental health, safety and quality standards.
Electricity supply to all. Cost effective supplies. Reliable electricity
Submit draft report (for approval of the implementation plan) to the Ministry of Energy and thereafter to the AG for review before gazetting
Gazetted regulatory instruments. Grid code, electrical safety codes and supply rules
Staff Director Electricity
Competitive industry.Safe industry.Environmentally friendly industry.Support for increased energy efficiency.Efficient and effective corporate operations
Hold 2 stakeholder workshops DirectorElectricity
4 m
Develop and acquire customer service software for processing customer service data and complaints
Customer service data software
DirectorElectricity
Included in cost of acquiring an ERP system
Formulate, enforce and review environmental health, safety and quality standards
Competitive industry.Safe industry.Environmentally friendly industry.Support for increased energy efficiency.Efficient and effective corporate operations
Formulate mechanisms on incentives/penalties by benchmarking through visits to other utilities
Mechanisms on incentives/ penalties
Director Electricity
3 m
PPAs/ licensing of cogeneration benchmarking by visits to Mauritius
Cogeneration benchmarking visits to Mauritius
Director Electricity
1.5 m
Licensing panel’s visits to Mombasa, Kisumu, Nakuru, Eldoret and Nyeri for licensing
Licensing Director Electricity
1.5 m
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OUTCOME (Strategies) OUTCOME INDICATOR
OUTPUT (Activities) Output Indicator Unit Responsibility Baseline Year
&Value 2007/08
Target Year
1 2 3 4 5
Licensing panel’s participation in the international conference on installations, wiring and licensing
Attend conference Director Electricity
1.5 m
Attend meetings on East African Power Pool
Attend power pool meetings
Director Electricity
2 m
Participate in annual conferences/workshops of IEK, KERB in Nairobi and IET in UK
Attend conferences/ workshops
Director Electricity
Included in the budget
Formulate, enforce and review environmental health, safety and quality standards
Competitive industry.Safe industry.Environmentally friendly industry.Support for increased energy efficiency.Efficient and effective corporate operations.
Develop and acquire data mapping software for information on quality of supply from licensees
Data mapping software on quality of power supply
Director Electricity
20 m
Print electricians and electrical contractors’ licences
Licences Director Electricity
5 m
Develop and acquire data bank software for electricians and electrical contractors
Data bank software for electricians and electrical contractors
Director Electricity
Included in the MIS consult-ancy funded by IDA
Formulate, review and enforce rules, regulations and codes for the energy sector
Electricity supply to all. Cost effective supplies.Reliable electricity.Competitive industry.Safe industry.Environmentally friendly industry.Support for renewable energy.Support for increased energy efficiency.Efficient and effective corporation operations
Develop licensing rules.Model power purchase agreements
Network service contracts, licences and permits
Reviewed licensing rules. Model power purchase agreements.
Staff assisted by consultant
Director Electricity
Commission Secretary
Included in the budget
Model network service contracts
Model licenses/ permits
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OUTCOME (Strategies) OUTCOME INDICATOR
OUTPUT (Activities) Output Indicator Unit Responsibility Baseline Year
&Value 2007/08
Target Year
1 2 3 4 5
Formulate, review and enforce rules, regulations and codes for the energy sector
Electricity supply to all.Cost effective supplies.Reliable electricity.Competitive industry.Safe industry.Environmentally friendly industry.Support for renewable energy.Support for increased energy efficiency.Efficient and effective corporate operations
Issue, renew, modify, suspend or revoke licences and permits for all undertakings in the energy sector
Register of licences and permits.Reports on suspended or revoked licences and permits. Reports on sanctions imposed
Staff Director Electricity
Included in the budget
Review PPAs and network service contracts
Approved PPAs and network service contracts
Staff Director Electricity
Included in the budget
Ensure that all undertakings are properly licensed and updated on their obligations
Licenses/ permits and reports
Staff Director ElectricityCommission Secretary
Included in the budget
Take a leading role in formulating, enforcing and reviewing environmental, health, safety and quality standards for the energy sector, in coordination with other statutory authorities
Safe industry.Environmentally friendly industry.Support for renewable energy.Support for increased energy efficiency.Efficient and effective corporate operations
Develop monitoring and enforcement protocols for quality of supply, including reports and follow-ups
Quality of supply inspection schedules, reports and follow-ups
ICT staff assisted by agents
Director ElectricityDirector ElectricityCommission SecretaryDirector Renewable Energy
5 m
Examination and certification of electrical energy meters
Cost effective supplies.Reliable electricity
Examine and type approval of meters used for ascertaining the quantity of energy
Type approvals and reports of examinations
Done at cost to persons requiring the service
Director Electricity
Included in the budget
Develop and implement a framework for the regulation of electrical installation work
Review electrical installation work rules
Electricians’ licences and electrical contractors’ certificates
Staff Director Electricity
Included in the budget
Receive and process applications for the licensing of electricians and electrical contractors
Staff Director Electricity
Included in the budget
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OUTCOME (Strategies) OUTCOME INDICATOR
OUTPUT (Activities) Output Indicator Unit Responsibility Baseline Year
&Value 2007/08
Target Year
1 2 3 4 5
Printing of electricians’ licenses and electrical contractors’ certificates
Printed at cost to electricians
Electrical contractors
Director Electricity
Included in the budget
Develop and implement a framework for the regulation of electrical installation work
Cost effective supplies.Reliable electricity
Issue commencement of work notices and completion certificate to electrical contractors
Results of interviews
Electricians and electrical contractors licensing panel
Director Electricity
6 m
Register commencement of work notices and completion certificates
Staff Director Electricity
Included in the budget
Participate in the international conference on electrical installations, wiring and licensing
Licensing panel’s participation in the international conference on installations, wiring and licensing
Electricians and electrical contractors licensing panel
Director Electricity
Included in the budget
Take a leading role in formulating, enforcing and reviewing environmental, health, safety and quality standards for the energy sector, in coordination with other statutory authorities
Safe industry.Environmentally friendly industry.Support for renewable energy.Support for increased energy efficiency.Efficient and effective corporate operations
Develop criteria for licensing of petroleum business.Develop process and procedures for application, review, approval, renewal and revocation of business licenses
Petroleum licensing criteria and procedures
Director Electricity
Importation, wholesale, retail, exportation storage, transportation refining
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OUTCOME (Strategies) OUTCOME INDICATOR
OUTPUT (Activities) Output Indicator Unit Responsibility Baseline Year
&Value 2007/08
Target Year
1 2 3 4 5
Take a leading role in formulating, enforcing and reviewing environmental, health, safety and quality standards for the energy sector, in coordination with other statutory authorities
Safe industry.Environmentally friendly industry.Support for renewable energy.Support for increased energy efficiency.Efficient and effective corporate operations
Develop criteria for construction permits.Develop process and procedures for application, review, approval and renewal of construction permits for retail sites. Bulk storage facilities. LPG bulk storage.Pipeline and refineries. Coordinate with KEBS to ensure that construction standards for retail sites, bulk storage, and LPG bulk storage have been developed, approved and published
Construction permit criteria and procedures.
Standards
Director Petroleum
Develop criteria for issuing permits for bulk petroleum road transportation trucks. Jointly with KEBS develop standards for bulk petroleum transportation trucks. Develop criteria for certification of petroleum truck drivers. Develop criteria for licensing road transport business. Issue notice to town authorities to establish safe parking yards for petroleum trucks
Road transport criteria and standards
Director Petroleum
Monitor, ensure implementation of, and compliance with the principles of fair play in the energy sector, in coordination with other statutory authorities.
Competitive industry Develop a process for routinely establishing petroleum landed costs.Develop a rocess for routinely monitoring petroleum prices in the market
Director Petroleum Director Economic Regulation
App
endi
ces
39
OUTCOME (Strategies) OUTCOME INDICATOR
OUTPUT (Activities) Output Indicator Unit Responsibility Baseline Year
&Value 2007/08
Target Year
1 2 3 4 5
Monitor, ensure implementation of, and compliance with the principles of fair play in the energy sector, in coordination with other statutory authorities
Develop a feedback process on information costs and prices
Director Petroleum
Director Economic Regulation
Take a leading role in formulating, enforcing and reviewing environmental, health, safety and quality standards for the energy sector, in coordination with other statutory authorities
Safe industry.Environmentally friendly industry.Support for renewable energy.Support for increased energy efficiency.Efficient and effective corporate operations
Licensing of charcoal. Licensing/permits for power generation, including micro and small hydro. Certification of technical experts and technologies
Licensing procedures for renewable energy
Director Renewable Energy
Formulate a regulatory framework. Work with KEBS and the Renewable Energy Association to develop standards.Develop standards for charcoal making
Take a leading role in formulating, enforcing and reviewing environmental, health, safety and quality standards for the energy sector, in coordination with other statutory authorities
Safe industry.Environmentally friendly industry.Support for renewable energy.Support for increased energy efficiency.Efficient and effective corporate operations.
Legalise the standards already developed by KEBS, so that they may be enforced
Director Renewable Energy
Formulate rules, regulations and codes of practice for the trade of renewable energy sources. Formulate rules, regulations and codes of practice for the technology to be used.Formulate codes of practice for efficient use of resources.Formulate and enforce rules and regulations for energy conservationEnhance capacity to review PPAs and licensing of cogeneration and other renewable energy technology projects
Visit countries with leading edge cogeneration and renewable energy technologies
Staff DirectorRenewable Energy
6 m
Ener
gy R
egul
ator
y Co
mm
issio
n St
rate
gic
Plan
200
8-20
12
40
OUTCOME (Strategies) OUTCOME INDICATOR
OUTPUT (Activities) Output Indicator Unit Responsibility Baseline Year
&Value 2007/08
Target Year
1 2 3 4 5
Take a leading role in formulating, enforcing and reviewing environmental, health, safety and quality standards for the energy sector, in coordination with other statutory authorities
Safe industry.Environmentally friendly industry.Support for renewable energy.Support for increased energy efficiency.Efficient and effective corporate operations
Prescribe the manner and intervals within which the energy audits shall be conducted
Energy auditors recruited
Energy auditor
DirectorRenewable Energy
Manager EHS
4 m
Develop monitoring and enforcement protocols for EHS
EHS inspection schedules, reports and follow ups
Workshops
Staff
Manager EHS 4 m
Develop an EHS inspection schedule, including reports and follow-ups
Occupational hygienist recruited
Occupational hygienist
Manager EHS
SeniorManager Human Resources and Administration
Included in the budget
EHS inspection schedule for electricity, petroleum and renewable energy sectors
4x4 vehicle Manager EHS 6 m
EHS audit reports 1-2 week inspection per month
Stationery
Manager EHS Included in the budget
Comprehensive sector-specific EHS audits – outsourced
Petroleum sector EHS consultation
Manager EHS 20 m
App
endi
ces
41
OUTCOME (Strategies) OUTCOME INDICATOR
OUTPUT (Activities) Output Indicator Unit Responsibility Baseline Year
&Value 2007/08
Target Year
1 2 3 4 5
Renewable energy EHS consultation
15 m
Electricity EHS consultation
20 m
Maintain a list of accredited energy auditors
Energy audit register
Stationery DirectorRenewable Energy
Included in the budget
Energy auditors accreditation committee
Energy auditors accredited
Energy auditors accredited
DirectorRenewable Energy
Included in the budget
Procure sound meter Sound meter Sound meter DirectorPetroleum Manager EHS
0.5 m
Improve inspections on installations and facilities, in conjunction with other statutory authorities
Safe industry.Environmentally friendly industry.Support for renewable energy.Support for increased energy efficiency.Efficient and effective corporate operations
Develop an inspection schedule including checking for under- dispensing and adulteration of petroleum and calibration of machines
Inspection/ investigation officers recruited
Inspection/ investigation officers
Director Petroleum
Included in the budget
Petroleum standards officer recruited
Petroleum standards officer
Director Petroleum
Included in the budget
Regular inspections
4x4 vehicle Director Petroleum
6 m
Inspection for license vetting and complaint investigation
1-2 week inspections per month
Director Petroleum
6.72 m
License and train all inspectors and agents on the latest standards and best practices
Licensed and trained inspectors and agents
Petroleum consultant
Director Petroleum
Included in the budget
Ensure consistent communication of updated codes and standards to licensees
Public education campaigns
Outsource publicity campaign
Director Petroleum
Included in the budget
Ener
gy R
egul
ator
y Co
mm
issio
n St
rate
gic
Plan
200
8-20
12
42
OUTCOME (Strategies) OUTCOME INDICATOR
OUTPUT (Activities) Output Indicator Unit Responsibility Baseline Year
&Value 2007/08
Target Year
1 2 3 4 5
Monitor, ensure implementation of, andcompliance with the principles of fair play in the energy sector, in coordination with other statutory authorities
Competitive industry.Safe industry.Environmentally friendly industry.Support for increased energy efficiency.Efficient and effective corporate operations
Formulate regulations governing fair competition in the energy sector
Fair competition regulations.Utility performance benchmarks. Regulatory accounting templates
Director Economic Regulation
Commission Secretary
Included in the budget
Monitor compliance with fair competition regulations
Monitoring and compliance report
DirectorEconomic Regulation
Commission Secretary
Included in the budget
Establish protocols with other statutory agencies with similar or overlapping functions: KEBS, Monopolies Commission, KFS, CBS, KIPPRA
Cooperation protocols with participating agencies
Director Economic Regulation
Commission Secretary
Included in the budget
Set fair tariffs that ensure investors are adequately compensated and consumers fairly charged
Competitive industry.Safe industry.Environmentally friendly industry.Support for increased energy efficiency.Efficient and effective corporate operations
Prescribe principles for tariffs, tariff structures and terms of supply
Retail electricity tariffs policy framework updated
Staff time (man-hours)
Director Economic Regulation
Included in the budget
Feed-in tariffs policyUpdate Fichtner tariff study
Director Economic Regulation
30 m
Set, review and adjust retail electricity tariffs
Adjusted retail electricity tariffs and tariff structures
Consultant and counterpart staff
Director Economic Regulation
Included in the budget
Monitoring of EUT, QoS, generation mix
M&E reports Staff time(man-hours)
Director Economic Regulation
Included in the budget
App
endi
ces
43
OUTCOME (Strategies) OUTCOME INDICATOR
OUTPUT (Activities) Output Indicator Unit Responsibility Baseline Year
&Value 2007/08
Target Year
1 2 3 4 5
Monitoring financial performance of regulated entities
M&E reports Staff time(man-hours)
Director Economic Regulation
Included in the budget
Exert oversight on midstream and downstream petroleum operations
Effective regulation of supply, distribution and pricing of petroleum products
Petroleum economist
Director Economic Regulation
Included in the budget
Develop automated systems for handling electrical installation work
Efficient and effective corporate operations
Develop an automated system for dealing with data on electrical installation work, electricians and electrical contractors
Operational software to handle data on electricians and electrical contractors
ICT Manager Information Technology
Included in the budget
Ener
gy R
egul
ator
y Co
mm
issio
n St
rate
gic
Plan
200
8-20
12
44
OUTCOME (Strategies) OUTCOME INDICATOR
OUTPUT (Activities) Output Indicator
Unit Responsibility Baseline Year
&Value 2007/08
Target Year
1 2 3 4 5
Develop framework for dispute and complaint resolution
Competitive industry.Safe industry.Environmentally friendly industry.Support for increased energy efficiency
Review the complaints and dispute resolution rules
Reviewed complaints and dispute resolution rules
Staff assisted by consultant
Director Electricity
IDA
Competitive industry.Safe industry.Environmentally friendly industry.Support for increased energy efficiency.Efficient and effective corporate operations
Engage licensees and consumers on their responsibilities and rights
Model customer charter, licensee customer charters and reports on the same. Demand Side Management (DSM) programmes, workshops and seminars.
Staff Director ElectricityDirector PetroleumDirector Economic RegulationDirector Renewable EnergyCommission Secretary
10 m
Receive and process complaints and disputes from electricity consumers, including hearings by the commission
Reports on complaints and hearings
Staff assisted by consultant
Director Electricity
10 m
Develop automated systems for handling consumer complaints and disputes
Efficient and effective corporate operations
Develop an automated system for customer service, including handling complaints and disputes
Operational customer service software
ICT Manager Information Technology
Included in the budget
Objective 2
To protect the interests of consumers, investors and other stakeholders
App
endi
ces
45
OUTCOME (Strategies) OUTCOME INDICATOR
OUTPUT (Activities) Output Indicator
Unit Responsibility Baseline Year
&Value 2007/08
Target Year
1 2 3 4 5
Ensure the objects and purposes of the Energy Act, and the goals of Vision 2030, particularly those under the ERC mandate, are carried out
Electricity supply to all.Cost effective supplies.Reliable electricity.Competitive industry.Safe industry.Environmentally friendly industry.Support for increased energy efficiency.Efficient and effective corporate operations
Make proposals to the minister, and draft necessary regulations and guidelines based on best practice and consultation
Proposals to the minister, draft regulations and guidelines
Director General
Included in the budget
Develop draft policy/ coherent position paper on the ERC’s roles for government review and approval
Draft policy/ coherent position paper
Director General
Included in the budget
Obtain clarification on the roles of other related statutory authorities (e.g. KEBS, NEMA, Kenya Forest Services, Weights and Measures, Competition Commission) to ensure there is no duplication or overlap
Clarificationobtained
Director General
Included in the budget
Review Energy Act to ensure it is comprehensive and clear on regulations and guidelines developed for the three sub-sectors
Revised Energy Act
Commission Secretary
Included in the budget
Objective 3
To influence, advise on and implement government policy in order to meet the statutory objects and functions set for the ERC
Ener
gy R
egul
ator
y Co
mm
issio
n St
rate
gic
Plan
200
8-20
12
46
OUTCOME (Strategies) OUTCOME INDICATOR
OUTPUT (Activities) Output Indicator
Unit Responsibility Baseline Year
&Value 2007/08
Target Year
1 2 3 4 5
Propose and lobby for amendments to the Energy Act
Amended Energy Act
Staff assisted by consultants
Director General
Included in the budget
Influence policy on low income consumers and other vulnerable groups
Influence policy on special interest groups (large consumers)
Electricity supply to all.Cost effective supplies.Reliable electricity.Environmentallyfriendly industry.Support for increased energy efficiency
Collect data on energy consumption
Reports Staff assisted by consultants
Director Economic Regulation
Included in the budget
Maintain consumer profiles Reports Staff time (man-hours)
Director Economic Regulation
Included in the budget
Advise government on the impact of its policy on these consumer groups
Reports Staff time (man-hours)
Included in the budget
Review government policy on quality of supply, pricing and efficiency issues
Competitive industry.Safe industry.Environmentally friendly industry.Support for increased energy efficiency
Take inventory of existing policy and regulatory instruments in the electricity sub-sector vis-à-vis the ERC mandate
Reviewed regulatory instruments
Staff assisted by consultant
Director Electricity Director Economic Regulation
Included in the budget
Review government policy on quality of supply, pricing and efficiency issues
Competitive industry.Safe industry.Environmentally friendly industry.Support for increased energy efficiency
Identify areas where regulatory tools (rules, regulations, codes and technical standards) are required and initiate the process of formulating standards in conjunction with other statutory authorities
Reports and updated regulatory tools
Staff assisted by consultant
Director Electricity
Commission Secretary
Included in the budget
App
endi
ces
47
OUTCOME (Strategies) OUTCOME INDICATOR
OUTPUT (Activities) Output Indicator
Unit Responsibility Baseline Year
&Value 2007/08
Target Year
1 2 3 4 5
Ensure the objects and purposes of the Energy Act, and the goals of Vision 2030, particularly those under the ERC mandate, are carried out
Electricity supply to all.Cost effective supplies.Reliable electricity.
Review, transfer and customise all existing regulations from MOE to ERC strategic storage.Initiate stakeholder discussions. Initiate development of standards and practices for biofuels, and petroleum fuel conservation measures. Initiate public awareness and education
Director Petroleum
Ensure the objects and purposes of the Energy Act, and the goals of Vision 2030, particularly those under the ERC mandate, are carried out
Competitive industry.Safe industry.Environmentally friendly industry.Support for increased energy efficiency.Efficient and effective corporate operations
Implement and ensure that government fiscal controls, auditing policies and practices, and budgetary controls are adhered to
Less audit queries.Good audit certificate
In-house capability. External auditors
Directors and department heads
Included in the budget
Ener
gy R
egul
ator
y Co
mm
issio
n St
rate
gic
Plan
200
8-20
12
48
OUTCOME (Strategies) OUTCOME INDICATOR
OUTPUT (Activities) Output Indicator Unit Responsibility Baseline Year
&Value 2007/08
Target Year
1 2 3 4 5
Collect and maintainenergy data
Support for increased energy efficiency.Efficient and effective corporate operations
Collect, collate and analyze energy data
Bi-monthly petroleum price surveys
Recruit petroleum data collection and entry officer
Collaboration with KPC for other towns
Director Economic Regulation
Directors and department heads
Included in the budget
Internationalcrude oil price data
Subscriptions, e.g. to Platts, Petroleum, Economist, etc.
Collaborate with NOCK
1.2 m
Oil port charges, refining, storage and transport cost data
Collaboration with shippers, KPRL, KPC
Nil
Petroleum price build-up framework
Staff time (man-hours) stationery
Included in the budget
Indicative monthly petroleum prices
Staff time(man-hours) Stationery
Included in the budget
Electricity generation and sales data
Staff time(man-hours)Stationery
Included in the budget
Renewable energy technology data
Staff time(man-hours) Stationery
Included in the budget
Objective 4
To be at the forefront of planning, research, preservation and dissemination of energy sector data, information and best practice.
App
endi
ces
49
OUTCOME (Strategies) OUTCOME INDICATOR
OUTPUT (Activities) Output Indicator Unit Responsibility Baseline Year
&Value 2007/08
Target Year
1 2 3 4 5
Prepare and monitor indicative national energy plan
Establish national energy planning committee
Energy planning committee
Staff time (man-hours) Stationery
Director Economic Regulation
Included in the budget
Establish power planning sub-committee
Power planning sub-committee
Staff time (man-hours) Stationery
Included in the budget
Establish fossil fuel planning sub-committee
Fossil-fuels planning sub-committee
Staff time (man-hours) Stationery
Included in the budget
Establish renewable energy planning sub-committee
Renewable energy planning sub-committee
Staff time (man-hours) Stationery
Included in the budget
Coordinate preparation of least cost power development plans
Updated least cost power development plans
Staff time (man-hours) Stationery
Included in the budget
Review investment programmes for petroleum products supply and distribution infrastructure
Reports on planned investments on petroleum industry installations
Staff time(man-hours) Stationery
Director Economic Regulation
Included in the budget
Review investment programmes for renewable energy technologies
Reports on planned investments for renewable energy technologies
Staff time(man-hours) Stationery
Included in the budget
Procure, install and undertake training on power systems planning tools/software (MAED, LEAD, etc.)
Planning tools procured and training undertaken. Prepare 25-year national energy plans
Consultant, counterpart staff
Included in the budget
Ener
gy R
egul
ator
y Co
mm
issio
n St
rate
gic
Plan
200
8-20
12
50
OUTCOME (Strategies) OUTCOME INDICATOR
OUTPUT (Activities) Output Indicator Unit Responsibility Baseline Year
&Value 2007/08
Target Year
1 2 3 4 5
Research and development
Undertake energy research and studies
Study on energy use patterns
Consultant, counterpart staff
Director Economic Regulation
30 m
Structure conduct analysis (SCA) of the petroleum industry
Consultant, counterpart staff
30 m
Study on renewable energy pricing
Consultant, counterpart staff
DirectorEconomic Regulation
15 m
Study on expanded opportunities for co-generation
Consultant, counterpart staff
30 m
Re-assessment of potential for small hydro
Consultant, counterpart staff
30 m
Position paper on role of biomass in energy supply mix
Consultant, counterpart staff
15 m
Position paper on role of renewable energy in the energy supply mix
Staff time (man-hours)
Nil
Study on viability of LNG for power generation in Kenya
Consultant, counterpart staff
30 m
Study on role of LPG in energy supply mix
Consultant, counterpart staff
30 m
Study on the role of community based distributed generation systems in Kenya
Consultant, counterpart staff
15 m
App
endi
ces
51
OUTCOME (Strategies) OUTCOME INDICATOR
OUTPUT (Activities) Output Indicator Unit Responsibility Baseline Year
&Value 2007/08
Target Year
1 2 3 4 5
Collect and maintain energy data
Develop resource centre with modern technology
Modern resource centre Resource centre policy and rules
Investment in IT infra-structure, platforms and software
Senior Manager Human Resource and Administration
Included in the budget
Develop an effective knowledge management database
Internet based research OPAC (online public access catalogue).Proper charge in/out systems
In house capability R-MIS consultancy
Manager Information Technology
Included in the budget
Participate in developing a state-of-the-art resource centre
State-of-the-art resource centre. OPAC
In house capability with assistance from a consultant, R-MIS
Senior Manager Communications and Public Affairs
Manager Information Technology
Included in the budget
Obtain appropriate software to support the internal processes and knowledge management
Updated database. Updated OPAC
In house capability with assistance from a consultant.R-MIS
Senior Manager Communications and Public Affairs
Manager Information Technology
Included in the budget
Purchase adequate space, quality furniture and computers
Modern resource centre In house capability
Commission Secretary
Included in the budget
Ener
gy R
egul
ator
y Co
mm
issio
n St
rate
gic
Plan
200
8-20
12
52
OUTCOME (Strategies) OUTCOME INDICATOR
OUTPUT (Activities) Output Indicator Unit Responsibility Baseline Year
&Value 2007/08
Target Year
1 2 3 4 5
Recruitment Realisation of corporate objectives
Identification of vacant positions, preparation of position profiles and advertisement, received applications, shortlists, interview schedules, reference checks, letters of offer
Availability of skilled human resources
Recruitment costs
Senior Manager Human Resources and Administration
Included in the budget
Employee attraction and retention
Motivated and productive employees
Internal survey to establish employee expectations, and satisfaction levels. Formulation of attraction and retention strategy
Employee turn-over. Performance and results
Senior Manager Human Resources and Administration
Create a learning organisation
Efficient and effective discharge duties
Equip the resource centre according to identified needs. Subscribe to energy related journals, and other professional magazines, newsletters, journals, etc
Availability of relevant value-added reading and reference materials
Subscription fees
Senior Manager Human Resources and Administration
Included in the budget
Performance management
Realisation of corporate objectives
Formulate a policy on performance management.Design a performance appraisal tool
Policy, appraisal tool, set and agreed upon targets
Senior Manager Human Resources and Administration
Staff training and development
Efficient service delivery
Identify organisation training requirements and relevant training programmes
Availability of competent staff
Training costs
Senior Manager Human Resources and Administration
Included in the budget
Objective 5
To strengthen the ERC’s institutional capacity to discharge its functions
App
endi
ces
53
OUTCOME (Strategies) OUTCOME INDICATOR
OUTPUT (Activities) Output Indicator Unit Responsibility Baseline Year
&Value 2007/08
Target Year
1 2 3 4 5
Create a learning organisation (learning culture)
Efficient and effective corporate operations
Subscribe to journals, e.g. on energy and economics, finance, EHS and energy auditing
Subscription to three journals
Subscription fees
Senior Manager Human Resources and Administration
Included in the budget
Procure books 3 per section – economic regulation, financial, EHS and energy audits
Financial resources
Senior Manager Human Resources and Administration
0.6m
Training One international and two local trainings per officer, per year
Two local trainings and one international training attended
Senior Manager Human Resources and Administration
Included in the budget
Create a learning organisation (learning culture)
Efficient and effective corporate operations
Attend conferences One international and two local conferences per officer, per year
International and local conferences attended
Senior Manager Human Resources and Administration
Included in the budget
Train in ICT skills on databases Become ICT compliant
Regular database training
Senior Manager Human Resources and Administration
Included in the budget
Carry out training needs and study tours
Attend one international and two local capacity building trainings
Senior Manager Human Resources and Administration
Included in the budget
Ener
gy R
egul
ator
y Co
mm
issio
n St
rate
gic
Plan
200
8-20
12
54
OUTCOME (Strategies) OUTCOME INDICATOR
OUTPUT (Activities) Output Indicator Unit Responsibility Baseline Year
&Value 2007/08
Target Year
1 2 3 4 5
Encourage regular team building activities
Efficient and effective corporate operations
Attend all ERC team building exercises
Participate in team building exercises
Senior Manager Human Resources and Administration
3.5 m
Create a learning organisation (learning culture)
Efficient and effective corporate operations
Develop a good resource centre World class resource centre
In house capability with assistance from consultant
Senior Manager Communications and Public Affairs
Included in the budget
Twinning with other regulatory agencies or institutions with technical expertise for knowledge and skills transfer
At least one international twinning or attachment and two regional and local
In house capacities in liaison with other regulators
Senior Manager Human Resources and Administration
6 m
Create a learning organisation (learning culture)
Efficient and effective corporate operations
Subscribe to relevant journals and periodicals, newspapers, Kenya Gazettes, newsletters and other specific journals requested by departments
Subscription fees paid on time
In house capability with assistance from consultant
Senior Manager Communications and Public Affairs
Included in the budget
Regular circulation of e-mails to all staff informing them on what’s new
Circulatedjournals to staff
In house capability with assistance from consultant
Senior ManagerCommunications and Public Affairs
Included in the budget
App
endi
ces
55
OUTCOME (Strategies) OUTCOME INDICATOR
OUTPUT (Activities) Output Indicator Unit Responsibility Baseline Year
&Value 2007/08
Target Year
1 2 3 4 5
Set up effective internal processes and controls
Efficient and effective corporate operations
Review financial management policies
Strong financial regulations and procedures manual (good budgetary controls)
In house capability plus use of latest technology i.e. upgrading current financial system
Senior Manager Finance
Included in the budget
Ensure adequate financing
Efficient and effective corporate operations
Identify sources of financing
Sound financial statements e.g. a balanced budget
In house capability
Included in the budget
Encourage regular team building activities
Efficient and effective corporate operations
Find out the level of team work in the ERC
Written report In house with assistance of consultant
SeniorManagerHuman Resources and Administration
Included in the budget
Identify potential trainers, and/or consultant and training
Trainer identified.Periodic training
5 m
Recruitment Efficient and effective corporate operations
Recruit persons with following skills and knowledge: petroleum supply, chain logistics, petroleum facilities design. Petroleum market analysis. Training of persons directly and indirectly involved in petroleum regulation. Secondment of newly recruited personnel to KPRL, KPC, NOCK for hands-on familiarisation
Petroleum experts SeniorManager Human Resources and Administration
Ener
gy R
egul
ator
y Co
mm
issio
n St
rate
gic
Plan
200
8-20
12
56
OUTCOME (Strategies) OUTCOME INDICATOR
OUTPUT (Activities) Output Indicator Unit Responsibility Baseline Year
&Value 2007/08
Target Year
1 2 3 4 5
Set up effective internal processes and controls
Efficient and effective corporate operations
Draft internal summary guidelines on human resources, fleet, correspondence, registry and stores management
Transport requisition guide. Fleet Control guide. Mail controls and distribution. Filing, storage, retrieval and archiving stores. Management and requisition
In house capabilities
SeniorManager Human Resources and Administration
Included in the budget
Set up effective internal processes and controls
Efficient and effective corporate operations
Continue second phase of ISO certification training
ISO certification Consultant Senior Manager Human Resources and Administration
0.6 m
Operate the human resource management system
Updated human resource status
SeniorManager Human Resources and Administration
Included in the budget
Create a learning organisation (learning culture)
Efficient and effective corporate operations
Carry out training needs assessment/training plan and secondment study tours for best practices
Training needs assessment report
In house capabilities
SeniorManager Human Resources and Administration
Included in the budget
Training plan projection
In house capabilities
SeniorManager Human Resources and Administration
Included in the budget
Secondment/ attachments
In house capabilities
SeniorManager Human Resources and Administration
Included in the budget
App
endi
ces
57
OUTCOME (Strategies) OUTCOME INDICATOR
OUTPUT (Activities) Output Indicator Unit Responsibility Baseline Year
&Value 2007/08
Target Year
1 2 3 4 5
Create a learning organisation (learning culture)
Efficient and effective corporate operations
Carry out training needs assessment/training plan and secondment study tours for best practices
Study tour In house capabilities
SeniorManager Human Resources and Administration
Included in the budget
Research on best practices
In house capabilities
SeniorManager Human Resources and Administration
Included in the budget
Twinning with other regulatory agencies or institutions with technical expertise for knowledge and skills transfer
Twinning arrangements
In house capabilities in liaison with other regulators
SeniorManager Human Resources and Administration
Included in the budget
Build a robust ICT infrastructure and knowledge management system
Efficient and effective corporate operations
Carry out a study on the current MIS and recommend appropriate improvements
Study report with viable recommendations
R-MIS consultancy
Manager Information Technology
IDA(WB)
Formulate ICT strategic plan ICT strategic plan R-MIS consultancy
ManagerInformation Technology
IDA(WB)
Build a robust ICT infrastructure and knowledge management system
Efficient and effective corporate operations
Formulate ICT policy document
ICT policy document
R-MIS consultancy
Manager Information Technology
IDA(WB)
Redesign and implement a dynamic ERC website
Attractive, informative and interactive website
In-house capability with assistance from a website design consultant
Senior Manager Communications and Public Affairs
Manager Information Technology
Included in the budget
Ener
gy R
egul
ator
y Co
mm
issio
n St
rate
gic
Plan
200
8-20
12
58
OUTCOME (Strategies) OUTCOME INDICATOR
OUTPUT (Activities) Output Indicator Unit Responsibility Baseline Year
&Value 2007/08
Target Year
1 2 3 4 5
Obtain appropriate ICT software to support the internal processes and knowledge management
Appropriate software
In-house capability with assistance from R-MIS consultant
Manager Information Technology
10 m
Obtain (new, additional and renewals) software licenses
Licensed software In-house capability with assistance from R-MIS consultant
Manager Information Technology
3 m
Build a robust ICT infrastructure and knowledge management system
Efficient and effective corporate operations
Put in place and maintain a knowledge management system
Knowledge management system in place
In-house capability with assistance from R-MIS consultant
Manager Information Technology
2 m
Improve integration of various systems
Integrated systems
In-house capability with assistance from R-MIS consultant
Manager Information Technology
2 m
Train ICT end-users on ICT skills
ICT end-users trained on ICT skills
Local and overseas training
Manager Information Technology
3 m
Train ICT professionals on emerging technologies
ICT professionals trained regularly
Local and overseas training
Manager Information Technology
Included in the budget under training costs
Encourage the use of the internet for research
Internet based research
In-house capability
Manager Information Technology
Included in the budget
App
endi
ces
59
OUTCOME (Strategies) OUTCOME INDICATOR
OUTPUT (Activities) Output Indicator Unit Responsibility Baseline Year
&Value 2007/08
Target Year
1 2 3 4 5
Build a robust ICT infrastructure and knowledge management system
Efficient and effective corporate operations
Participate in developing a state-of-the-art resource centre
State-of-the-art resource centre
In-house capability with assistance from R-MIS consultant
ManagerInformation Technology
Senior Manager Communications and Public Affairs
Nil
Develop and produce communication materials and ensure their distribution to the ERC’s internal and external public.
Efficient and effective corporate operations
Research, compile and collect information. Consult with various departments on messages.
Annual reports Designers and printers
Writing, editing and design of publications
Newsletters, brochures, calendars.
Develop and produce communication materials and ensure their distribution to the ERC’s internal and external publics
Efficient and effective corporate operations
Participate in developing a state-of-the-art resource centre
State-of-the-art resource centre
In-house capability with the assistance of R-MIS consultant
ManagerInformation Technology
Senior Manager Communications and Public Affairs
Nil
Write specifications for the various materials for procurement.Liaise with procurement
Branded merchandise (calendars, Christmas cards, key holders, caps, umbrellas, T-shirts, ERC folders, diaries, executive pens, etc)
Ener
gy R
egul
ator
y Co
mm
issio
n St
rate
gic
Plan
200
8-20
12
60
OUTCOME (Strategies) OUTCOME INDICATOR
OUTPUT (Activities) Output Indicator Unit Responsibility Baseline Year
&Value 2007/08
Target Year
1 2 3 4 5
Public information and awareness campaigns to create widespread understanding of, and support for ERC amongst the target audience and the public at large
Efficient and effective corporate operations
Draft messages for management approval
Approved messages
Media consultant
Senior Manager Communications and Public Affairs
Carry out a survey to establish the three most listened-to TV and radio stations
Names of three top stations
Liaison with the selected TV and radio stations
Draft commercials
Present draft commercials for management approval
Approved commercials
Production and airing of commercials
30 second commercials
Media advocacy to strategic partner
Efficient and effective corporate operations
Identify chief editors of various media houses
List of the various editors
Media experts
Senior Manager Communications and Public AffairsPrepare press kits Press kits
availableInvite the various editors to a press reception
Well attended press reception
Development and production of 30 min ERC documentary to raise positive awareness of the ERC as the energy sector regulator
Efficient and effective corporate operations
Prepare paper management approval of field production-filming locations, shooting, script edits, final script
Airing of documentary
Consultant Senior Manager Communications and Public Affairs
Media training Efficient and effective corporate operations
Carry out a training needs assessment.Develop specifications for trainers
Trained staff Consultant Senior Manager Communications and Public Affairs
CSR policy Efficient and effective corporate operations
Write draft CSR policy and present to management and commission for approval
Approved CSR policy
Senior Manager Communications and Public Affairs
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OUTCOME (Strategies) OUTCOME INDICATOR
OUTPUT (Activities) Output Indicator Unit Responsibility Baseline Year
&Value 2007/08
Target Year
1 2 3 4 5
Initiate or join existing initiatives by identifying a CSR activity that supports sustainable exploitation of natural sources of energy
Efficient and effective corporate operations
Identify a CSR initiative. Liaison with the various stakeholders.Carry out CSR activity
Attendancelist of CSR event
Various stakeholders
Senior Manager Communications and Public Affairs
Develop provincial outreach programme for individual and small scale consumers
Efficient and effective corporate operations
Identify various consumers in each province. Identify relevant energy related issues.Liaise with a coordinator to identify issues faced by consumers. Collect and compile related information for discussion.Prepare and distribute information packs. Hold public seminar with consumers at grass roots level
Information packs, brochures, minutes and resolutions of public seminar
Senior Manager Communications and Public Affairs
Promote community relations activities by ERC staff, such as tree planting at the various licenses
Efficient and effective corporate operations
Identify license and activities. Participate in community relations activities.
Approved license.Attendance list
Stakeholder Senior Manager Communications and Public Affairs
Participation in energy related activities
Efficient and effective corporate operations
Identify relevant energy related activities. Participation in the activities
Information packs, brochures Attendance list
Camera, video, laptop
Senior Manager Communications and Public Affairs
Included in the budget
Participation in PRSK activities
Efficient and effective corporate operations
Prepare material for entry in the various competitions
Report/award Senior Manager Communications and Public Affairs
Included in the budget
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OUTCOME (Strategies) OUTCOME INDICATOR
OUTPUT (Activities) Output Indicator Unit Responsibility Baseline Year
&Value 2007/08
Target Year
1 2 3 4 5
Membership of professional associations
Efficient and effective corporate operations
Participate in various activities
Report Senior Manager Communications and Public Affairs
Included in the budget
Capacity building Efficient and effective corporate operations
Participate in training Report Senior Manager Communicationsand Public Affairs
Included in the budget
Conference/ seminars Efficient and effective corporate operations
Participate in conferences and seminars and present papers
Report Laptop, camera, video
Senior Manager Communications and Public Affairs
Included in the budget
Corporate branding Efficient and effective corporate operations
Drafting of brand manual for ERC materials.Branding of all ERC stationery and vehicles
Approved ERC brand manual. Branded materials, vehicles and stationery
Senior Manager Communications and Public Affairs
Included in the budget
ERC inaugural launch Efficient and effective corporate operations
Set up planning committee.Plan and organise launch
Minutes of planning committee. Successful ERC launch
Consultant Senior Manager Communications and Public Affairs
3.8 m
Plan and coordinate innovative events to showcase the ERC and generate publicity
Efficient and effective corporate operations
Identify activities that can be showcased.Management approval of activities and budget
Special events Consultant Senior Manager Communications and Public Affairs
Promote sponsorships for various community activities which will accord ERC opportunities to interact with the community and generate a positive image for ERC activities
Efficient and effective corporate operations
Identify activities to sponsor. Carry out sponsorship activity
Approved sponsorship activities.List of attendance
Senior Manager Communications and Public Affairs
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OUTCOME (Strategies) OUTCOME INDICATOR
OUTPUT (Activities) Output Indicator Unit Responsibility Baseline Year
&Value 2007/08
Target Year
1 2 3 4 5
Promote staff award scheme as motivational tool
Efficient and effective corporate operations
Prepare staff award scheme proposal. Select outstanding staff
Present awards to outstanding staff
Senior Manager Communications and Public Affairs
Carry out a communication audit with the objective of assessing the implementation and impact of communication through monitoring and evaluation
Efficient and effective corporate operations
Prepare justification paper for M&E.Carry out communication audit
Communication audit report
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Appendix B. Detailed budget
General assumptions
The budget estimates were prepared for a five-year period from 2007/08 to 2011/12. The general assumptions are based on the ERC’s latest forecast for 2007/08 and the proposed budget for 2008/09. These assumptions were validated and informed by discussions with relevant staff at the ERC.
Table 4: Economic assumptions
Economic indicator RateYear on year inflation (based on the government’s target inflation rate)* 5% US Dollar exchange rate Ksh 67Growth in gross domestic product (GDP) (based on the first quarter of 2007
7%
(*Source: Central Bank of Kenya website)
Revenue assumptions
The ERC will have two primary sources of revenue - the electricity levy and the petroleum levy. No revenue from renewable energy was included in this budget as this sector is considered to be under-developed and the revenue drivers for the sector have not been defined. Other revenue sources include interest income and miscellaneous income.
Electricity levy
The ERC electricity levy is assumed to be 3 cents per kilowatt hour (kWh). The unit sales for 2008-2009 are assumed to be 5.8 billion kWh as per the ERC’s proposed budget for 2008-09. This was used as the basis to project the revenue for the five-year budget period at an average annual growth rate of 7% (GDP growth). In addition, it is assumed that the ERC will collect 96% of this levy as per its historical financial statements.
Table 5: Historic electricity sales volume
Year 2004 2005 2006 Electricity sales volume (kWh) to the nearest billion 3.8 4.1 4.4
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Table 6: Electricity sales volume forecast
Year 2007/08 (Proposed)
2008/09 (Proposed)
2009/10 (Forecast)
2010/11 (Forecast)
2011/12 (Forecast)
Electricity sales volume (kWh) to the
nearest billion
5.0 5.6 5.7 5.8 6.0
Petroleum levy
The ERC petroleum levy was set at 5 Kenya cents for super, regular, kerosene and industrial oil and 4 Kenya cents per litre for automotive diesel oil. The projections for the petroleum sales volume are assumed to be as per the ERC budget for 2008/09. A growth rate of 7% per annum has been applied for the remaining years of the five-year budget period.
Table 7: Petroleum sales forecast
Year 2007/08 (Proposed)
2008/09 (Proposed)
2009/10 (Forecast)
2010/11 (Forecast)
2011/12 (Forecast)
Petroleum sales volume (kilograms or litres) to the nearest billion
Nil 3.7 3.8 4.0 4.1
Interest income
Interest income is assumed to be Ksh1.75 million per annum as per the ERC’s budget for 2008/09.
Operating cost assumptions
The operating cost projections are based on estimates for 2008/2009 provided by the ERC and adjusted for inflation.
Commissioners’ expenses
These include board member salaries and allowances, monthly fees, sitting allowances and other expenses such as travel and accommodation, telephone, medical, etc. The salaries are based on the ERC budget for 2008/09 and increased by 10% per annum for the remaining years of the budget period. All allowances are assumed to remain the same as that provided for in the ERC 2008/09 budget. The projections for the other expense items are based on the proposed ERC budgeted figures for 2008/2009 and adjusted for inflation.
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Personnel emoluments
This includes staff salaries, allowances and pensions. Personnel costs as per the ERC budgets for 2007/08 and 2008/09 were used in the forecast budget. Salaries and pensions are based on the ERC budget for 2008/09 and increased by 10% for the remaining years of the budget period. All allowances are assumed to remain the same as that provided for in the budget for 2008/09. Other expense items under personnel emoluments are increased by an inflation rate of 5% per annum for the remaining years of the forecast period.
Training and other personnel costs
These costs include staff medical expenses, staff welfare, uniforms, subscriptions, training and group life insurance, and were projected using an inflation rate of 5% per annum.
Office supplies
These costs are assumed to increase with inflation each year.
Transport and travel
This is assumed to increase with inflation.
Public relations and consumer services
These costs are assumed to be pegged at 10% of all other expenditure per annum.
Utilities
These include telephone, water and electricity, as per the proposed ERC budget and are increased with inflation for the remaining years of the forecast period.
Information and communication related expenses
These include annual internet costs, software licenses and web-hosting costs, which were assumed to be Ksh 4.8 million per annum as per ERC budget for 2008/09.
Occupancy and office services
Occupancy and office services include the following expenses as per proposed ERC budget estimates 2008/2009.
Table 8: Occupancy and office services
Description Cost (Ksh) 2008/2009 Office rent 14,400,000 Security 720,000 Office cleaning 1,200,000 Repair and service of office equipment 700,000 Insurance 800,000 Total 17,820,000
Office rent was assumed to remain at Ksh14.4 million per annum as per ERC budget for 2008/09. Other occupancy service costs are assumed to increase with the rate of inflation.
Table 9: Consultancy and other services
Cost (Ksh) 2008/2009 Cost (Ksh) 2008/2009
Audit fees 250,000 Bank charges 300,000 Consultancy and technical assistanceImplementation of ISO certification programme 600,000Web redesign and maintenance 180,000Customer satisfaction survey 500,000Design and implementation of a modern filing and document retrieval system
250,000
Employee and work environment survey 100,000Payroll support and maintenance 50,000Accounting software support and maintenance 250,000Studies in the energy sector 25,000,000Other 250,000Total 27,730,000
This total was increased by the rate of inflation to project consultancy costs for the remaining years of the five-year budget period. Any additional activities resulting from the strategic plan, have been identified below (under strategic planning activities) and require additional funding and re-prioritising.
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Table 10: HIV/AIDS Programme
The following amount has been set aside as a health care fund for this programme. Year Amount (Ksh) 2007/2008 200,000 2008/2009 1,005,000 2009/2010 2,211,000 2010/2011 2,432,100 2011/2012 2,675,310
Contingency
A general provision of 1% of the annual revenue from the electricity and petroleum levies is assumed.
Tax assumptions
The ERC is exempt from corporate tax.
Strategic planning activities
The table below provides a summary of the costs of the proposed new strategic plan activities. The details of the activities are provided in Appendix A of this report.
Table 11: Breakdown of the proposed strategic planning activities
Strategic planning activities
2007/08 2008/09 2009/10 2010/11 2011/2012
Ksh Ksh Ksh Ksh KshEconomic regulation and EHS
30,240,000 73,540,000 77,040,000 82,040,000 62,040,000
Petroleum (not included above)
1,000,000 1,000,000 1,000,000 2,500,000 1,000,000
Customer service
6,000,000 24,750,000 4,250,000 750,000 750,000
Information communication technology
600,000 12,350,000 12,350,000 2,350,000 2,350,000
Human resources
2,000,000 2,000,000 1,700,000 1,700,000 1,700,000
Public relations 7,832,709 16,265,988 16,981,518 17,737,406 18,536,285Power systems 6,800,000 12,050,000 11,050,000 7,050,000 9,050,000Total 54,472,709 141,955,988 124,371,518 114,127,406 95,426,285
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Table 12: Proposed strategic planning activities mapped into relevant line items
These costs have been mapped into the relevant budget line items as illustrated in the table below. Description 2007/08 2008/09 2009/10 2010/11 2011/12
Ksh (‘000s) Ksh (‘000s)
Ksh (‘000s)
Ksh (‘000s)
Ksh (‘000s)
Expenditure Capital expense for the year 241 52,128 69,250 12,000 -Recurrent expenditure Commissioners’ expenses 26,333 22,073 26,207 28,642 30,517 Personnel emoluments 58,747 68,730 128,884 141,773 155,950Training and other personnel costs 21,311 22,884 23,432 31,492 34,642 Office supplies and expenses 3,563 3,672 4,020 4,686 5,154 Transport and travel expenses 5,822 5,560 12,827 15,097 16,607 Public relations/consumer services 7,619 22,680 25,000 34,570 38,027 Telephone 1,758 1,506 3,336 3,636 3,936Information and communication technology related expenses
1,190 1,850 3,160 6,000 6,000
Occupancy and office services 5,954 6,314 20,060 25,000 27,500 Consultancy and other services 9,269 85,366 23,300 45,653 50,219 HIV/AIDS programmes - 1,005 1,410 2,432 2,675 Sinking fund provision 8,467 10,000 10,000 10,000 10,000 Contingency and other services 467 2,000 2,000 12,074 12,380 Total expenditure for the year 150,741 305,768 352,886 373,055 393,607
Table 13: Strategic planning activities not covered by the five-year budget
The following table highlights the shortfall of activities not covered by the ERC budget. These will require re-prioritising by ERC management and/or additional funding from other sources.
Description 2007/08 2008/09 2009/10 2010/11 2011/12 Ksh Ksh Ksh Ksh Ksh
Consultancy services 14,850,000 41,570,000 48,883,500 49,427,675 27,899,059 Printing, photocopying and binding
9,290,000 7,615,000 6,112,000 7,608,850 6,105,543
ICT 28,550,000 7,550,000 Public relations 14,383,333 34,210,000 3,389,962 157,560 Total 38,523,333 111,945,000 65,935,462 57,194,085 34,004,602
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The five-year budget shows surpluses, which contribute towards achieving the strategic planning activities not covered by the budget. Table 14 highlights additional external funding requirements for the activities during the budget period.
Table 14: Additional funding requirements for the proposed strategic planning activities
Description 2007/08 Ksh ‘000
the 2008/09 Ksh ‘000
2009/10 Ksh ‘000
2010/11 Ksh ‘000
2011/12 Ks ‘000
Surplus/(deficit) as per budget 19,760 25,511 (74,336) (63,853) (74,227)Strategic activities not covered in the budget
(38,523) (111,945) (65,935) (57,194) (34,004)
Additional funding required (18,763) (86,434) (140,271) (121,047) (108,231)
Capital expenditure Based on the ERC’s expanded mandate, the following capital items have been provided for in the budget for 2008/09:
Table 15: Capital expenditure items
Capital expenditure item Units Unit cost (Ksh)
Cost (Ksh) in 2008/09
Motor vehicles 1 4.5 million 4.5 million
Computer equipment and softwareComputers for additional staff 15 80,000 1.2 million UPS equipment 20 10,000 200,000 Computer software 10.5 million Printers/copiers 10 40,000 400,000 Blackberry/handheld devices 10 30,000 300,000 Networking and internet connections 1.5 million Furniture and fittings This includes all the partitioning, work stations, kitchen, meeting rooms, resource centre, etc.
36 million
Equipment Telephones 15 7,500 112,500 Fax machines 3 15,000 45,000 Other office equipment 1.25 million TOTAL 56 million
For the remaining years of the budget period, Ksh 24 million has been provided for in 2009/10 and Ksh 12 million for 2010/11, for capital expenditure items. There is no provision for capital expenditure in 2011/2012.
Pages 9 and 31
Pipeline for the Sondu/Miriu Hydropower Project (SMHPP), which was developed by KenGen and has an average annual energy production of 330 GWh. Unlike other hydropower projects in Kenya, SMHPP does not have a major dam and associated large reservoir, but relies on the flow of the river with only a small storage capacity at the intake, thus reducing the environmental impact.
Page 13
Power lines in a field in the Kisumu area.
Page 16
A geothermal power plant at Lake Naivasha.
Page 22
Wind turbines on a wind farm in Gudihalli village.
THE PICTURES
Page 25
The PS10 solar power plant at Sanlucar la Mayor outside Seville. The solar power tower, the first commercial solar tower in the world, run by the Spanish company Solucar (Abengoa), can provide electricity for up to 6,000 homes. Six hundred and twenty four heliostats (movable mirrors) concentrate the sun’s rays to the top of a 115m high tower where a solar receiver and a steam turbine are located. Page 28
Bujagali Falls, Uganda, the proposed site of a new hydroelectric dam to supplement the Owen Falls Dam.
Page 33
Petroleum fuels constitute the main source of commercial energy in Kenya.
Energy Regulatory CommissionP.O. Box 42681-00100 NairobiEagle Africa Centre, Longonot Road, Upper HillTel: +254-20-2847000/200Cell: +254-722-200947/0734-414333Fax: + 254-20-2717603
Email: [email protected]