- The company is selling to Kenya Power at Sh18 per kilowatt.
- Other firms selling at Sh7 per kilowatt.
Image: GEORGE OWITI
MPs have threatened to terminate contract of US electricity firm, Orpower Company Limited, over what they term "unjustified expensive tariffs".
The company has been supplying electricity to Kenya Power since 2000.
According to documents tabled before the Energy Committee of the National Assembly, the firm has been selling power at Sh18 per kilowatts at a time other vendors charge Sh7 for every kilowatt.
The team chaired by Mwala MP Vincent Musyoka put to task the firm’s top management to explain their expensive rates.
Kilifi South MP Ken Chonga, while calling for the termination of the public-private partnership contract between Kenya Power and the US firm, termed it unnecessary burden on taxpayers.
“We need justifications of why they should continue being in business with such huge electricity tariffs otherwise their contracts should be terminated,” he said.
The Musyoka-led team has been carrying out inquiry on the high cost of electricity in the country.
The committee has written to the Energy ministry to be appraised on the cost implications of terminating the deal.
The US-based firm is among firms listed as charging high electricity tariffs that is fuelling the high cost of power to majority of Kenyans.
The firm generates 120 megawatts from its four geothermal wells in Olkaria III Complex.
Musyoka wondered why the firm has not found it fit to scale down its cost even after it had scooped its initial investment cost that is always factored in determining the selling cost of power.
“How is it since 2000 you have retained the same electricity tariff, yet you have already recouped your investment?” he posed.
“You have been in business for a long time and yet a number of companies that have entered the market recently are selling electricity for much less.”
In defence, Orpower company legal adviser Lynn Alster explained the high cost is caused by the huge cost they incur in updating and maximising the geothermal plants.
“This is not the most expensive company selling geothermal power and we are here on the invitation of the government. We did our business and as a US firm, we don’t do monkey business,” Alster told the committee.
Nambale MP George Mulanya discounted the justification, insisting the tariffs must be revised downwards..
“It’s not the government that is complaining, its Kenyans that complained. When you tell us you are here because of the government that fine, but that shouldn’t entitle you to charge high electricity tariff,” he said.
In response, the company’s legal adviser insisted they will only review the tariffs after Kenya Power honour its Sh60 million debt obligation it owes them.
The committee will meet the Energy ministry to see how much the country will incur by terminating the contract.