Taxpayers have no means or right to scrutinise how their money is spent to buy power generated by private producers, the Public Investment Committee (PIC) of the National Assembly heard.
The national power distribution firm, Kenya Power Managing Director Bernard Ngugi cited Non-Disclosure Agreements and confidentiality clauses in declining to reveal the owners of beneficiary firms and 17 Power Purchase Agreements (PPAs) that committed the lose making entity to the shady dealings.
According to Kenya Power records, some of the listed independent power producers in the country are, Iberafrica Power, Tsavo Power, Thika Power, BioJuole Kenya Limited, Mumias-Cogeneration and OrPower 4.
Others are Rabai Power, Imenti Tea Factory Hydro, Gikira Hydro, Triumph Power, Gulf Power, and Regen-Terem Hydro.
However, PIC committee chairman Abdulswamad Nassir ordered Kenya Power 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.
By yesterday evening, Ngugi was also required to table the 17 Power Purchase Agreements (PPAs) signed with the various firms.
Kenya Power’s electricity purchase costs stood at about Sh82.1billion in the financial year 2020, accounting for over half of its operating costs.
It is not clear why Kenya Power opts to buy power from individual producers without giving national power producer, Kenya Generating Company (Kengen) which the former owes billions of shillings in debt.
“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.” Ngugi said.
However, Nassir overruled the MD and instructed a directive be issued that the documents be tabled with the Office of the Clerk of National Assembly by yesterday evening.
The Informer has established the decree has not been honoured so far.
The committee also rejected 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.