MPs probing high power costs to table findings, recommend audit of existing deals
The National Assembly during a past session.
The current Power Purchasing Agreements (PPAs) will be subjected to special audit conducted by the Auditor-General to determine their actual cost if a report by legislators is passed by the House.
The Nation has learnt that the National Assembly committee on Energy that has been investigating high electricity costs will table its report Monday after 19 months of conducting inquiry.
A source in the committee told Nation that among the recommendations is to subject all power purchase deals signed by the government toa special audit by Auditor-General Nancy Gathungu.
The move, according to the committee, is to determine the actual cost of the PPA deals against actual market prices.
The committee has recommended that any PPA found to have been inflated prices at expense of taxpayers, will be forced to reduce their electricity selling cost or their contracts will be terminated as the starting point of reducing electricity cost.
“We have called for a special audit of all the PPAs to determine their actual cost,” said the source.
Sources say the decision was arrived at so as to avoid unilateral termination of the PPAs contracts as it would have exposed the government to litigations by power producers.
“This is a safe move as compared to blanket termination of the contracts. After the special audit, any inflated contract will be forced to adhere to what the Auditor-General has said or we now have a legal basis for terminating the contract."
Costly termination
The PPAs have been a major concern for the committee as MPs said majority of them were skewed and do not favour government.
Due to this, MPs said, consumers end up paying more for electricity.
An analysis presented before the committee in August this year by the Ministry of Energy showed that it would cost taxpayers Sh264 billion as compensation to Independent Power Producers (IPPs) if their contracts are terminated before their expiry dates.
Documents before the committee show that the contracts of about 13 PPAs are running up to 2041.
In her audit report covering financial years 2017/18 and 2020/21, Ms Gathungu, indicated that the cost of buying power from KenGen is Sh5.3 per KWh on average while buying from IPPS is about Sh15.3 per KWh.
