The curse of Kenya’s expensive electricity has been, is and will remain, the Independent Power Producers (IPPs) controlled by people in government and or close associates outside government.
Available data shows Kenya Power and Lighting Company (KPLC) bought 8.2 bn units of power and paid Sh45.2 bn at the rate of Sh5.48 per unit.
At the same time, KPLC paid Sh173.08 per unit for the 15 mn units bought from Triumph Power Generating Co. Ltd – which was the most expensive.
Although most IPPs are thermal driven, the take-or-pay model is most skewed against KPLC (read consumers). The difference between Triumph Power Generating Co. Ltd and KenGen is a whopping Sh167.6.
This is by all means would akin to a daylight violent robbery from helpless consumers.
Gulf Power Ltd sold a whopping 18 mn units at Sh121.56 bagging Sh2.2 bn. Thika Power sold 50 mn units at Sh54.62 smiling to the bank accounts with a whopping Sh2.8 bn.
IberAfricaPower and Tsavo Power Company Ltd associated with a powerful former KPLC MD from Central Kenya who served in the Moi era collected a total of Sh6.6 bn.
The IPPs are allowed by Energy and Petroleum Regulatory Authority (EPRA) to agree with KPLC on expensive and long-term Power Purchase Agreements (PPAs) which cannot be retired or varied since they are contractual in nature.
Incidentally, KPLC buys power from KenGen at Sh5.48 and end up reselling to consumers at 300 percent more – at Sh16.31 per unit.