House faults KPLC’s Ksh2b expenditure

Friday, June 3rd, 2022 02:30 | By
Kenya Power workers fix a transformer. PHOTO/File
Kenya Power workers fix a transformer. PHOTO/File

Kenya Power diverted Sh2 billion meant to cushion the company from electricity price reduction to clear pending bills, a report shows.

The report of the Budget and Appropriation Committee on the Estimates of Revenue and Expenditure for the 2022/2023 financial year and the Medium-term says the decision was made against approvals by the National Assembly.

The money was part of the Sh9 billion that the company was allocated to cushion it from the costs it would bear from the reduction of electricity costs.

Committee members regretted that although the first phase of the electricity price reduction was successfully implemented, it came at a huge cost to the taxpayer since the government had to allocate Kenya Power the Sh9.05 billion in the first supplementary estimates of the 2021/2022 financial year to cushion the company from the price reduction.

Presidential taskforce

“The committee noted that whereby Sh7.05 billion was utilised to cushion KPLC from the electricity price reduction, Sh2 billion was used for payment of pending bills which was not in line with the approval by the National Assembly,” reads the report.

In the report, the committee also raised concern about the progress by the Ministry of Energy and Kenya Power in implementing the recommendations of the presidential taskforce Report on the review of Power Purchasing Agreements (PPAs) to reduce electricity costs by 33 per cent.

According to the committee, the second phase of the electricity price reduction was behind schedule since it was planned to be completed by the end of March.

To shield Kenya Power from the effects of the electricity price reduction prior to implementation of the second phase, the MPs said that they had approved another Sh7.05 billion.

Way leave

Top ministry officials who had appeared before the committee, however, said the company was in the process of negotiating with Independent Power Producers with the aim of finalising the discussions during the 2022/2023 financial year.

The committee directed the ministry to prioritise paying pending bills owed as way leave compensation to individuals and those that have been pending for more than four years.

In September last year, President Uhuru Kenyatta promised to cut consumer electricity tariffs by 33 per cent by Christmas.

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