**Table 10. Formal regulatory governance in Kenya and comparators, 2015**

|**Indicators**|**Kenya**|**Senegal **|**Tanzania **|**Uganda**|**International**<br>**benchmark**|
|---|---|---|---|---|---|
|**Regulatory Governance**|56%|50%|65%|59%|59%|
|**_Accountability_**|95%|70%|95%|74%|83%|
|_Regulatory Oversight_|_100%_|_67%_|_100%_|_67%_|81%|
|_Legal Appeals_|_100%_|_100%_|_100%_|_100%_|100%|
|_Transparency_|_85%_|_44%_|_85%_|_55%_|67%|
|**_Autonomy_**|59%|71%|68%|81%|71%|
|_Decision-Making Autonomy_|_79%_|_33%_|_86%_|_85%_|79%|
|_Budgetary Autonomy_|_94%_|_100%_|_100%_|_100%_|80%|
|_Leadership Autonomy_|_63%_|_50%_|_88%_|_88%_|66%|
|_Managerial Autonomy_|_0%_|_100%_|_0%_|_50%_|59%|

Note: Scores based on index developed for the Rethinking Power Sector Reform Project. For more details go to project website at http://www.esmap.org/rethinking_power_sector_reform When it comes to autonomy, however, ERC’s scores are below average—with the overall score of 59 percent below the average for the global benchmark group of 71 percent, as well as the results of other Sub-Saharan African cases (table 10). Excluding the higher-than-average score on budgetary autonomy, the benchmarking exercise finds that ERC’s independence and authority are somewhat limited when it comes to decision-making, leadership, and management.

With respect to the decision-making dimension of autonomy, ERC’s mandate is expansive, scoring 79 percent in the benchmarking analysis. However, there are formal provisions under which the MoEP and the legislature can overturn a decision from the regulator. Another important limitation to ERC’s autonomy is related to the fact that ERC does not have the authority to issue subsidiary legislation, such as statutory instruments. Instead, it must make proposals to the MoEP on regulations and rules. Moreover, when a government body receives a recommendation from ERC and rejects or modifies it, it is not required to provide a public explanation for doing so. Though no ERC decision has been overturned by a ministry or government body in the last five years, ERC’s intended tariff increases have been delayed three times at the insistence of the government, before being implemented.

Kenyan retail tariffs are set so as to shield investors from volatility: foreign exchange and fuel costs are passed through automatically every month, and inflation semi-annually. The pass-through mechanism worked seamlessly from its introduction until 2017—an election year. The administration, already very sensitive to retail tariffs, refused in 2017 to allow the fuel-cost passthrough to increase retail tariffs as the country suffered from a drought. After the election, the passthrough was implemented. In the same vein, the regulator is meant to conduct a tariff review every three years. However, only four tariff reviews have been carried out to date—in 1999, 2008 , 2013 and 2018. Tariffs are a politically sensitive issue, with each adjustment falling under close scrutiny— even the small adjustments linked to fuel, foreign exchange rates, or inflation are sometimes blocked. Full reviews are even more political, making them near impossible to conduct in the run-up to or just after elections, as politicians predictably include promises to reduce electricity tariffs in their election campaigns. However, it is precisely because of this politicization of tariffs that the 36