Senators have summoned 11 independent power producers as they start investigations into the skyrocketing cost of electricity.
The Senate’s Energy committee seeks to establish why the IPPs are reportedly selling their product to Kenya Power at exorbitant prices, something that has been blamed for the high cost of electricity prices.
“We must find out why the IPPs signed skewed contracts for their own selfish gains at the expense of the ordinary Kenyans,” committee chairman Wahome Wamatinga said.
The IPPs are KenGen, Lake Turkana Wind Power, Orpower, Kippeto Energy, Africa Geothermal International, Rabai Power Plant, Thika Power, Triumph Power, Gulf Power, IEBEA Africa and Garissa Solar Power.
The management of the firms will appear before the panel on scheduled dates between March 20 and April 8.
The current average cost of electricity per unit is Sh25, an amount they explain can only allow a consumer to get 40 units for Sh1,000 or four units for Sh100 spent.
According to the audited accounts ending June 2021 KenGen supplied 8,443 gigawatt hours, which makes 70 per cent 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 holds 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 and Lighting Company.
The Nyeri senator said that was "unacceptable and we must get to the root of this".
Wamatinga said Kenyans have been exploited for a long time with high cost of electricity.
He said the cost must be brought down and those culpable of increasing the cost for their own benefit brought to book.
Wamatinga spoke on Wednesday when his committee met Electricity Consumers Society of Kenya (ECSK) on the high cost of power.
Led by ECSK executive director Isaac Ndereba, the lobby said high taxes and inflation are the biggest contributors to the high cost of power.
Ndereba told the committee that a consumer pays for Value Added Tax, fuel energy charge, forex charge, Water Regulatory Authority charge, Energy Petroleum Regulatory charge and inflation adjustment from the tokens they purchase. He said this raises the cost of electricity to unimaginable levels.
He revealed that IPPs signed contracts that they should be paid in foreign currencies and are only filling the deficit of national consumption to about 30 per cent.
“Your committee should find out why these IPPs signed the contract 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,” Ndereba said.
He questioned why IPPs are selling their power with varied costs with some supplying it at a cost of Sh26 per kilowatt yet KenGen the largest power producer, is selling theirs at Sh5 per kilowatts.
According to Ndereba, the losses being experienced in the electricity sector vary from month to month, questioning why the cost is always constant yet in other months it is 26 per cent and in other times it is even lower than 15 per cent.
“What was it last month? What was thermal generation last month. What is forex in our bills?” Ndereba posed.
During a recent debate on the cost of electricity on the floor of the Senate, Tana River Senator Danson Mungatana charged that the IPPs signed very punitive and unconscionable contracts against the people of Kenyans.
“Instead of doing that, they colluded to create such contracts. That is why one still has to pay for the units even when they are not being consumed. We have to establish the people who signed the contract," he said.
“We should know who did these mistakes. We are all suffering because some people deliberately colluded with these IPPs to corruptly acquire wealth.”