1. Since the demand for electricity outstrips the supply (and it takes long to bring up new power plants) , KPLC tries hard let everyone get a piece of the existing pie through use of those punitive usage bands. Their hope is that domestic users will be pushed to cut down on unnecessary consumption. Probably, they need to publicise this strategy better.
2. Despite electricity from the independent power producers (diesel plants) being more expensive than electricity from KenGen's hydro sources, KPLC is contractually bound to first exhaustively purchase from the IPPs before going for any cheaper power from KenGen. Cartels? Affirmative action? Lopsided contract?