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Kenyans have for years been exploited through exorbitant electricity bills that ended up benefiting a few Independent Power Producers (IPPs), the Senate was told yesterday.

The revelations were made as Senators began investigations on the contracts signed by the 11 IPPs and why the cost of electricity has been skyrocketing in recent years.

In the investigations, the Senators have summoned the 11 firms to explain why they are selling their product to Kenya Power at exorbitant prices and why they are being paid in foreign currencies, mainly in US dollars and Euros.

While appearing before the Senate Energy committee chaired by Wahome Wamatinga (Nyeri), Electricity Consumers Society of Kenya (ECSK) officials explained why the cost of electricity is ever rising.

ECSK Executive Director Isaac Ndereba said KenGen, which is the biggest producer of power in the country, supplies Kenya Power with electricity at a cost of Sh5 per kilowatt.

He questioned why some IPPs are selling their power to KPLC for as high as Sh26 per kilowatt.

Ndereba told the committee that a consumer pays for Value Added Tax, Fuel energy charge, Forex charge, Water Regulatory Authority (WRA) charge, Energy Petroleum Regulatory (EPRA) charge and inflation adjustment, which, he said, raises the cost of electricity to unimaginable levels.

Consumer burden

He revealed that IPPs signed their contracts that they should be paid in foreign currencies while they only fill the deficit of national power consumption by about 30 per cent.

“Your committee should find out why these IPPs signed the contracts to be paid in foreign currencies and why is it a charge being loaded to the consumer? We must find out why the cost of electricity is very high in Kenya,” said Ndereba.

According to Ndereba, the loses in the electricity sector vary from month to month and asked why the cost is always constant yet in other months, the losses are at 26 per cent and in others they are lower than 15 per cent.

“What was it last month? What was thermal generation last month? What is forex in our bills?” posed Ndereba.

30 per cent

Wamatinga said those who have been increasing the cost of power for their own benefit must be brought to book.

“We must find out why the IPPs signed skewed contracts for their own selfish gains at the expense of the ordinary Kenyans. This is unacceptable and we must get to the root of this,” said Wamatinga.

The current average cost of electricity per unit is Sh25, an amount they explained, can only allow a consumer get 40 units for Sh1,000 or four units for Sh100.

According to the audited accounts ending Financial Year June 2021, KenGen supplied a total of 8,443 gigawatt hours, which is 70 per cent of the total power consumed and was paid Sh44.8 billion.

IPPs supplied 3,000-gigawatt hours, which translates to about 30 per cent of the total power, and were paid more than Sh56 billion.

Wamatinga argued that if KenGen had supplied 100 per cent of the power consumed, the amount paid would have been Sh64 billion and that there have been a net savings of Sh37.1 billion to Kenya Power.

During a recent debate on the cost of electricity at the Senate, Danson Mungatana (Tana River) charged public officials who signed the skewed contracts with the IPPs acted against the people of Kenya yet they have the mandate to protect them.

Acquire wealth

“Instead of doing that, they colluded to create such contracts. That is why one has to still pay for the units even when they are not being consumed. We have to establish the people who signed the contracts. We should know who did these mistakes. We are all suffering because some people deliberately colluded with these IPPs to corruptly acquire wealth,” said Mungatana.

The lawmakers also want to know the percentage of access to electricity in each of the 47 counties and to do away with monopoly of the Kenya Power (KP).

Currently, the total installed capacity with the inclusion of off-grid power is 2,949 megawatts, with geothermal accounting for 863.1 megawatts, hydro 838 megawatts and wind 435 megawatts.