The National Assembly’s Departmental committee on Energy on Friday, August 4, put to task Independent Power Producers and Kenya Power over the high cost of electricity in the country.
The committee is seeking to establish why Kenyans are paying more for power with no signs of the prices easing soon.
Appearing before the committee, the deputy Auditor General Stanley Mwangi stated that the consumer bears any idle capacity on the IPP due to capacity charge contractual obligation.
Further, Mwangi indicated that this burden extends through the life of the contract which ranges between twenty and twenty-five years.
“Although the Management had previously indicated that plans were underway to re-negotiate the capacity charges downwards on the existing PPAs and align commercial operation dates of the PPAs in line with the Company’s medium-term power demand such that there is no excess power supply and generation by Power Producers, there has been no evidence on these negotiations.
In the meantime, the company continues to bear the high fixed capacity charges as the initiatives have not been implemented,” Mwangi told lawmakers.
The deputy Auditor General added that the Power Purchase Agreements (PPAs) did not have a capacity charge revision clause.
Revisit Power Purchase Agreements
Consequently, there may be no legal framework that can be used to initiate these revisions hence can be purely dependent on the goodwill from IPPs to renegotiate the agreements.
Moreover, he called for a review of Power Purchase Agreements and adopting reasonable rates without overloading the consumer.
At the same time, the office of the Auditor General recommended that the management should develop and implement strategic initiatives to improve Systems efficiency.
Kenya Power is to achieve this by reducing commercial and technical losses through benchmarking with efficient power utilities in the world.
Additionally, Kenya Power Managing Director Eng. Joseph Siror told the committee that the listed company is facing challenges to achieve its mandate of supplying affordable electricity to Kenyans.
On his part, committee chair Vincent Kawaya Musyoka called for the cleaning of the system and getting rid of illegal connections that push power rates upwards.
“We either work together to bring the cost of electricity down or we perish all of us,” said Musyoka.