Government Takes Control of KPLC in Reforms to Cut Electricity Costs

By Korir Isaac / Published October 8, 2021 | 9:16 am




KEY POINTS

Dr. Matiang’i stated that the proposed changes will yield the much-desired results and assured Kenyans that the unit cost of electricity billed to clients will soon go down.


Matiang'i KPLC

KPLC has been declared a special government project in a restructuring process that could see the cost of electricity drop.

According to the Interior Cabinet Secretary, Dr. Fred Matiang’i, an inter-ministerial team has been set up to audit and oversight KPLC.

The decision, according to the CS, is in line with the recommendations of the Presidential Task Force on the Review of PPAs entered into by KPLC following widespread concerns of high electricity bills.

“We are all concerned about the cost of power. Our bills are too high, and we have taken tough decisions to deal with challenges in this sector with the focus being the bringing down of the cost of power,” Dr. Matiang’i said.

The oversight team comprises the DCI, Financial Reporting Center (FRC), Assets Recovery Authority, and other investigative agencies.

They will investigate the alarming system losses within KPLC, procurement practices, insider trading, conflict of interests, and suspect transactions involving KPLC staff and others.

ALSO READ: Cytonn High Yield Solutions And Cytonn Projects Notes Funds Put Under Administration

KPLC has been running at a loss, with all indicators pointing to ineffective Power Purchase Agreements (PPAs) that have left the company heavily indebted while ironically paying for excess energy it does not need in take-or-pay arrangements blamed on poor negotiations and vested interests.

Apart from the high fixed capacity charges amounting to 47 billion shillings, the PPAs are bound by Commercial Operation Dates (CODs) that are not aligned with the company’s power demand.

This has often resulted in excess power generation even when the demand is low. In the 2019/2020 Financial year, KPLC posted a loss before tax of 7 billion shillings.

Its negative working capital position for the fourth consecutive year has also raised substantial doubt about its ability to sustain operations.

The system losses stood at 23.47 percent, exceeding the 19.99 percent limit approved by the Energy and Petroleum Authority (EPRA).

This is attributed to a lack of internal control measures put in place to mitigate losses including governance.

The company’s obligations to pay for goods and services that were acquired from suppliers were also not met with a long outstanding balance of 1.3 billion shillings resulting in the discontentment of financiers and suppliers.

Further, KPLC did not submit to the Unclaimed Financial Assets Authority 1.2 billion shillings. These were the deposit refunds to consumers, unidentified receipts, unpaid customer electricity deposits, and unpaid wayleaves compensation.

It also included unclaimed dividends and stale cheques as required by the Unclaimed Financial Assets Act 2011.

Dr. Matiang’i stated that the proposed changes will yield the much-desired results and assured Kenyans that the unit cost of electricity billed to clients will soon go down.





About Korir Isaac

A creative, tenacious, and passionate journalist with impeccable ethics and a nose for anticipated and spontaneous news. He may not say it, but he sure can make one hell of a story.

View other posts by Korir Isaac


More Articles From This Author








Trending Stories










Other Related Articles










SOKO DIRECTORY & FINANCIAL GUIDE



ARCHIVES

2021
  • January 2021 (182)
  • February 2021 (227)
  • March 2021 (325)
  • April 2021 (260)
  • May 2021 (285)
  • June 2021 (273)
  • July 2021 (277)
  • August 2021 (233)
  • September 2021 (271)
  • October 2021 (162)
  • 2020
  • January 2020 (272)
  • February 2020 (310)
  • March 2020 (390)
  • April 2020 (321)
  • May 2020 (335)
  • June 2020 (327)
  • July 2020 (334)
  • August 2020 (276)
  • September 2020 (214)
  • October 2020 (233)
  • November 2020 (242)
  • December 2020 (187)
  • 2019
  • January 2019 (253)
  • February 2019 (216)
  • March 2019 (285)
  • April 2019 (254)
  • May 2019 (272)
  • June 2019 (250)
  • July 2019 (338)
  • August 2019 (293)
  • September 2019 (306)
  • October 2019 (313)
  • November 2019 (362)
  • December 2019 (319)
  • 2018
  • January 2018 (291)
  • February 2018 (213)
  • March 2018 (278)
  • April 2018 (225)
  • May 2018 (235)
  • June 2018 (178)
  • July 2018 (256)
  • August 2018 (249)
  • September 2018 (256)
  • October 2018 (287)
  • November 2018 (284)
  • December 2018 (186)
  • 2017
  • January 2017 (183)
  • February 2017 (194)
  • March 2017 (207)
  • April 2017 (104)
  • May 2017 (169)
  • June 2017 (205)
  • July 2017 (190)
  • August 2017 (195)
  • September 2017 (186)
  • October 2017 (235)
  • November 2017 (253)
  • December 2017 (266)
  • 2016
  • January 2016 (165)
  • February 2016 (165)
  • March 2016 (190)
  • April 2016 (143)
  • May 2016 (245)
  • June 2016 (182)
  • July 2016 (271)
  • August 2016 (248)
  • September 2016 (234)
  • October 2016 (191)
  • November 2016 (243)
  • December 2016 (153)
  • 2015
  • January 2015 (1)
  • February 2015 (4)
  • March 2015 (166)
  • April 2015 (108)
  • May 2015 (116)
  • June 2015 (120)
  • July 2015 (148)
  • August 2015 (157)
  • September 2015 (188)
  • October 2015 (169)
  • November 2015 (173)
  • December 2015 (207)
  • 2014
  • March 2014 (2)
  • 2013
  • March 2013 (10)
  • June 2013 (1)
  • 2012
  • March 2012 (7)
  • April 2012 (15)
  • May 2012 (1)
  • July 2012 (1)
  • August 2012 (4)
  • October 2012 (2)
  • November 2012 (2)
  • December 2012 (1)
  • 2011
    2010
    2009
    2008
    2007
    2006
    2005
    2004
    2003
    2002
    2001
    2000
    1999
    1998
    1997
    1996
    1995
    1994
    1993
    1992
    1991
    1990
    1989
    1988
    1987
    1986
    1985
    1984
    1983
    1982
    1981
    1980
    1979
    1978
    1977
    1976
    1975
    1974
    1973
    1972
    1971
    1970
    1969
    1968
    1967
    1966
    1965
    1964
    1963
    1962
    1961
    1960
    1959
    1958
    1957
    1956
    1955
    1954
    1953
    1952
    1951
    1950