MPs train guns on Kenya Power, IPPs over high cost of electricity

Members of Parliament want the management of Kenya Power investigated over the high cost of electricity even as they demanded curbs on expensive power purchased from Independent Power Producers (IPPs)

The lawmakers were considering a motion on the high cost of power sponsored by Laikipia Woman Representative Jane Kagiri, which seeks to stop the Ministry of Energy and Kenya Power from getting into any agreements with IPPs until the House makes a decision on the current high cost of electricity.

The lawmakers also want the Ministry of Energy to engage in negotiations with power producers with a view to reducing the cost of power.

The MPs said the high cost of electricity can be attributed to the expensive power from IPPs, which is passed on to consumers.

Deputy majority leader Owen Baya said IPPs are reaping billions of shillings from taxpayers.

“The Energy committee needs to investigate the management at Kenya Power,” Mr Baya said.

Mr Baya questioned the variance of contracts and amounts Kenya Power pays IPPs, saying some of the power producers are paid more than others.

“With the rising cost of living in this country, we need to have a conversation on the cost of power. We need answers on how much Kenya Power pays these IPPs,” Mr Baya said.

Expensive contracts

Auditor-General Nancy Gathungu, in her audit report covering financial years between 2017/18-2020/21, indicates that the comparative cost of power purchase between Kenya Electricity Generating Company PLC (KenGen) and the IPPs indicates that it costs KPLC an average of Sh5.3 per KWh of power purchased from Kengen while it costs the company an average of Sh15.3 per KWh from the IPPs.

“It was noted that the effective unit cost of power purchased from some IPPs was as high as Sh195 per KWh and Sh118 per KWh while the same was sold at an average of Sh15.66 per KWh. The company, therefore, entered into very expensive contracts with IPPs and was in some instances selling power below the cost price,” Ms Gathungu says in her report.

Endebbes MP Robert Pukose said Kenyans have been subjected to a lot of suffering with the prices of tokens changing every month.

“Agreements with IPPs are unfair, it is high time the ministry looks at the electricity cost and addresses the problem,” Dr Pukose said. 

Malindi MP Amina Mnyazi said Kenyans are subjected to a lot of charges while buying tokens.

The new amount of units received is attributed to the new power tariffs announced by the Energy and Petroleum Regulatory Authority (Epra), which became effective on April 1st.

Under the new pricing, Epra significantly increased the cost of purchasing actual power, exclusive of taxes, levies and other charges.

Under the new tariffs, Epra has increased the base power price to Sh12.22 per unit, which is Sh4.52 higher than before.

Karachuonyo MP Adipo Okuome said the IPPs should be investigated since the amounts they are paid are not commensurate to the power they produce.

The lawmakers also questioned why Kenya Power is making losses despite continuing to overcharge consumers. 

Kibwezi West MP Mwengi Mutuse said Parliament must move in and break the cartels in the Energy sector that have pushed the cost of power beyond the reach of the common man.