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Waste of time? The futility of lawmakers' countless probes into rising power bills

 

 The Kenya Power offices along Harambee Avenue, Nairobi. [Jonah Onyango, Standard]

Insanity, according to a famous quote by the late German physicist Albert Einstein, is doing the same thing over and over and expecting different results.

And such, it appears, has been the nature of the dance between MPs and Kenya’s energy industry.

Lawmakers have perennially investigated the country’s electricity sector, seeking causes and solutions to the high cost of power. They usually end up on a winding road that leads to nowhere.

The numerous probes have failed to offer a way out of the ever-rising cost of power, with each team picking up from where the last one left.

The National Assembly’s Energy Committee is currently conducting such an inquiry. The Senate’s Energy Committee has also been carrying out a similar probe.

The National Assembly’s Energy Committee’s probe was triggered by a motion moved by Laikipia County MP Jane Kagiri that sought to reduce the cost of electricity in the country.

Ms Kagiri questioned the disparity between the cost of power generated by KenGen and the Independent Power Producers (IPPs).

When she brought the motion to Parliament, she noted that there is a need to regulate all IPPs in the country and publicise their locations, stakeholders, directors, management and addresses.

In addition, she said, “the agreements the IPPs have with Kenya Power should be made public to enable proper scrutiny.”  

She also wanted the Energy Committee to inquire into the operations of Kenya Power, particularly into the Power Purchase Agreements (PPAs) with IPPs as well as what she said was an over-reliance on IPPs against available renewable and other energy sources.

She also wanted the committee to recommend measures to be taken to reduce the cost of electricity.

The script sounds like that of the predecessor of the current committee that carried out a similar inquiry that did not bring forth much.

In the committee’s exit report, it appeared to argue that the appointment of the John Ngumi-led task force and its reporting back with recommendations had preempted what it had aimed to do.

“The matter has been overtaken by completion and ongoing implementation of a report by a task force appointed by the Executive on the same. The succeeding Committee in the 13th Parliament may ensure full implementation of the recommendations,” said the former Energy Committee that was chaired by former Ndaragwa MP Jeremiah Kioni in its final report.

Similar inquiry 

The committee had been investigating the industry following a query by then-Garrissa Township MP and the current Defence Cabinet Secretary Aden Duale.

In 2020, the Public Accounts Committee (PAC) also went through a similar inquiry in which it questioned players on high electricity costs. The committee sought explanations regarding the procurement processes, fuel costs, and regulatory mechanisms that impact the tariffs.

And it was the case in 2019 and 2018 where there were parliamentary debates and discussions on the high cost of electricity, with MPs raising concerns about the impact on businesses and households. Electricity sector players were summoned to provide explanations and proposals to address the issue.

All these inquiries have not had the impact of reducing electricity costs. If anything, power costs have gone up over the last five years. A unit of power in June was priced at Sh33.54 for households consuming 100 units or more per month, having increased from Sh22.60 in January 2018.

The Electricity Sector Association of Kenya (Esak) pointed out how futile the frequent investigations have been.

Speaking from an investor perspective, the association – which is a lobby for private sector players in the energy sector – told Mps that the investigations tend to be more disruptive as it sends signals of heavy-handed oversight of the industry to potential investors.

By Esak’s count, there have been four task forces and three parliamentary inquiries over the last six years looking into why power costs are high. The association noted that regular investigations that did not lead to anything meaningful only had the impact of eroding investor confidence.

Energy intrigues

Experts who have been observing the different inquiries, as well as other intrigues in the local energy sector note that the twin probes being undertaken by the National Assembly and the Senate, might not amount to much. 

Executive Director of the Electricity Consumers Society of Kenya (Eclos) Eng Isaac Ndereva noted that the approach by the different inquiries has always been wrong, at times with the investigating teams appearing to have made up their minds on what ails the sector. 

He also noted that in nearly all instances, the committees lack data, information and even expertise “to enable them to pose the right questions to the right players.”

“Every commission or committee that starts these inquiries starts on the wrong footing. They go thinking that there is corruption or there is someone who is messing with bills intentionally. They also tend to go for Kenya Power,” he said in an interview, adding that while all these could be the problem, investigating a problem needs open-mindedness.

“(Because of starting on this footing), they then tend to call the wrong people and also ask them the wrong questions and at the end of it, they never get to the bottom of the matter. Kenya Power, for instance, will not comment on the other matters about the bill, they can only talk about their bit within the bill.”

Elcos has on several occasions presented Parliament with what it believes is information that would enable them to engage sector players better on matters such as the pricing of electricity.

Other than the MPs who form the membership of the committees, they should also have a secretariat that would have analysts and researchers to help the lawmakers digest the information that they get.

Mr Ndereva noted that while the MPs and the Committee secretariat might have expertise, the power sector and particularly how billing is done in the sector is complex and without the right data, the current probes undertaken by parliament are unlikely to find new solutions.

“If the approach by the current inquiries is not structured, it is dead on arrival. The inquiry will not yield anything because they have no data. The industry players may volunteer the data, but the committee has no way of interpreting the data,” he said, adding that only a well-informed inquiry can yield a reduction in the cost of power.

“There is a way out. The best way out is to get the committees to sit down with experts who can help them understand what goes on and with this understanding, they will know the questions to ask. That way, they will have a fruitful way forward.

“Otherwise the electricity sector players will always take them around in circles. They will end up asking questions that are easy for people to skirt around. Again, if they are not engaging them with data, they will not get much done in terms of what they have set out to do.”

Power producers

Such was the case in 2021 when Kenya Power delivered the PPAs signed with different power producers after a back-and-forth with MPs on the confidentiality of some of the clauses in the documents. Again, nothing came of the exercise that was to aid MPs get ideas as to how to bring down the cost of power.  Mr Ndereva noted that information such as that contained in the PPAs could be fairly complex and committees may need experts to point out what the committee might need to take on sector players.

The Presidential Task Force on the Review of Power Purchase Agreements perhaps had the most success when it examined the electricity supply chain, fingering areas of inefficiencies. It went on to recommend cutting excess fat within State entities, which eventually led to a 15 per cent reduction in the cost of power.

Another further 15 per cent that would come from renegotiating PPAs with IPPs was, however, not to be. Renegotiating the contracts proved impossible as the IPPs held the ground that they would not take lower tariffs. It appears that the task force had anticipated such a scenario and pinpointed instances where different power producers were in breach of their PPAs.

This, the task force had hoped, would offer Kenya Power and the Energy Ministry enough ammunition to force the IPPs to the negotiating table. Failure to meet their end of the bargain, however watertight the PPAs could be, is grounds for penalties at the very least and even contract termination.

The contract breaches, the Ngumi task force said in its report, varied from the thermal power producers inflating the cost of the heavy fuel oil they use to generate electricity to wind power firms failing to feed the electricity grid with the amount of power agreed in their PPAs.

Auditor General Nancy Gthungu took up the case of the thermal IPPs and their procurement of heavy fuel oil and in April this year handed a report to Parliament. Electricity consumers have over the years been overbilled owing to malpractices in the procurement of heavy fuel oil that the thermal power producers use to generate electricity.

The audit shows that consumers paid billions over and above what they should have paid in compensating the power producers for what they used in acquiring the fuel.

The money that thermal IPPs spend on fuel is usually passed to consumers and is captured in the power bill as the Fuel Cost Charge (FCC).  

The charge has been blamed as among the factors that have sustained high power prices in the country.

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