Economy

Unmask owners of supplier firms, MPs order Kenya Power

Kenya Power

Kenya Power Managing Director Bernard Ngugi during an operation to curb illegal connections and theft of electricity in Huruma, Nairobi on March 15, 2021. PHOTO | DIANA | NGILA | NMG

Parliament has ordered Kenya Power #ticker:KPLC to disclose the identity of the owners of power producer firms which pocketed Sh50.2 billion in sales to the utility in the year to June 2020.

Abdulswamad Nassir, chairman of the Public Investment Committee (PIC) of the National Assembly said Kenya Power is required to table its 17 Power Purchase Agreements (PPAs) signed with the various firms by close of business today(Wednesday).

Kenya Power’s electricity purchase costs stood at about Sh82.1billion in the financial year 2020, accounting for over half of its operating costs.

PIC overruled Kenya Power managing director Bernard Ngugi who had attempted to forestall the disclosure citing confidentiality.

“Power Purchase Agreements have contractual provisions which would require more time to obtain consent and authorisation from court processes because of confidentiality clauses such as Non Disclosure Agreements” the official said, prompting Mr Nassir to issue a directive that the documents be tabled with the Office of the Clerk of National Assembly.

The committee also rejected Mr Ngugi’s defence that the disclosure would be unhelpful since a government-appointed a task force was already reviewing them.

President Uhuru Kenyatta in March appointed a task force to review PPAs signed between Kenya Power and all electricity generators with a goal of renegotiating energy prices and other terms downwards.

The team is chaired by boardroom veteran John Ngumi and will has 15 other members drawn from the private and public sectors.

Kenya Power’s PPAs remain controversial amid concern that the firm has signed contracts committing it to take more electricity than it can sell, leaving it to pay onerous capacity charges to energy producers even when their plants are idle.

Average annual growth in consumption has been only 3.5 percent in the last 5 years, much lower than the 6 percent demand growth projection assumed in the tariff, despite the doubling of the connection base during the period.