Troubles continue to pile at the already loss-making Kenya Power (KPLC) after it was slapped yet again with a Sh722.31 million penalty for flouting 40-day window of paying for the electricity supplied in the financial year ended June 2019.
According to KPLC, this is a 28.9 per cent drop from the preceding period when KenGen hit the struggling power distributor with a Sh1.02 billion penalty an annual report from Kenya Electricity Generating Company (KenGen) confirms.
“Interest income from Kenya Power relates to interest penalties charged to Kenya Power due to late payments of invoices. Interest on late payments accrues after 40 days,” says KenGen.
KenGen records indicate that as at end of June 2019, Kenya Power was owed it Sh18.86 billion, pointing to accumulated debts that will eat into the profit through high finance costs.
Earlier in May, records at Capital Markets Authority indicated that President Uhuru’s mother- Mama Ngina Kenyatta owns 2.2 million shares or a 0.11 per cent stake in the KPLC, a power monopoly whose ownership is dominated by institutional investors like the Treasury and scandal-filled National Social Security Fund (NSSF).
It’s not clear when she acquired the minority stake, which is small compared to the multi-billion-shilling investments controlled by the Kenyatta family in real estate, insurance, education, banking, manufacturing, farming and hospitality sectors.
Johnson Nderi, an analyst at Suntra Investment Bank stated that if the Sh37.7 million share was not been hived off a larger trust, it was certainly not bought for commercial reasons.
Even before that, KPLC has been struggling to sell the electricity supplied by power generators such as KenGen. Covid-19 disruptions have served to complicate the situation further exposing Kenya Power to an increased burden of paying for idle electricity.
Records indicated that Kenya Power had about 22.9 per cent of the unutilized power supply as the local power production between January and August stood at 7,469 million kilowatt-hours (KWh) against the 5,759 million KWh sold by Kenya Power.
The agreement signed in the contracts between the State and Power producers Kenya Power to buy the agreed amount of electricity regardless of whether or not the utility needs the energy.
By the time KenGen was closing its books for the financial year ended June, Sh3.45 billion due from Kenya Power had been outstanding for more than 60 days while a further Sh1.21 billion had remained unpaid for over a year.
Kenya Power buys a mix of hydro, thermal, wind and geothermal-generated electricity from KenGen and independent producers for onward sale to homes and businesses. KenGen then bills it every month for the power delivered.
KenGen currently sells its generated electric energy to a single off-taker, Kenya Power, and recognises this as a business risk.
The firm has in the past indicated that it would ride on newly enacted Energy Act to sell bulk energy to multiple customers as opposed to just Kenya Power alone.
This comes at a time KPLC had, on Thursday last week demanded that Energy and Petroleum Regulatory Authority (EPRA) be removed from power purchase agreement (PPA) negotiations to reduce the oversupply of electricity in the market.
KPLC wants a new body established to preside over the signing of power deals which have overburdened it with an excess supply that must be paid for.
All these are happening at a time the High Court has reinstated the corrupt EPRA boss Pavel Oimeke who’s first term at the helm was set to expire on August 1, before being corruptly reappointed for another three-year term on July 27.
A petitioner, Emannuel Wanjala, had moved to court to block his re-appointment, accusing him of colluding with illegal LPG dealers, nepotism, tribalism and favouritism.
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