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{
    "id": 1511439,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/1511439/?format=api",
    "text_counter": 515,
    "type": "speech",
    "speaker_name": "Mwala, UDA",
    "speaker_title": "Hon. Vincent Musau",
    "speaker": null,
    "content": "Further, for commercials, our pricing is 36 per cent higher than the world average and 87 per cent higher than Africa's average. Something must be done about the prices. The first significant issue affecting the sector is the skewed Power Purchase Agreements (PPAs) and how they are onboarded. The second issue worth noting is expensive take or pay arrangements. These kinds of agreements require Kenya Power Company to pay for electricity generated, whether it is used or not. This leads to financial strain because these costs are usually transferred to the consumer. Additionally, overreliance on Heavy Fuel Oil (HFOs) contributes to high cost of electricity. Therefore, it is imperative for this House to adopt this report in order to address these challenges effectively. In so doing, the House will ensure stable, affordable, and sustainable electricity supply for all Kenyans thus fostering economic growth and improving the quality of life of the population. In carrying out our mandate, and in compliance with Article 118 of the Constitution, we did extensive public participation. We received over 40 submissions from players in the energy sector, regulatory agencies, and Independent Power Producers (IPPs). We also held over 15 meetings with identified stakeholders among others. As a result of this inquiry, I have sponsored an amendment to the Energy Act on behalf of the Departmental Committee on Energy to introduce a third-party player in the metering and Last Mile Connectivity. If an average Kenyan requests Kenya Power Company to connect them to electricity without the Government sponsored programme of connectivity, they will part with between Ksh300,000 to Ksh400,000. This is the cost of connection for a distance of one or two poles. The cost of these materials out there barely goes beyond Ksh50,000. Therefore, by introducing competition, a third party-player, and opening the scope, we believe that more Kenyans will be connected. We are also going to reduce commercial losses. Upon analysing the submissions presented, the Committee took note of vital issues along the value chain. Some of them are listed as key observations. First, we have 41 Energy and Petroleum Regulatory Authority (EPRA) approved PPAs that are supplying power to the interconnected system. Second, there is general opaqueness in the disclosure of beneficial ownership of IPPs, majority of them listing foreign companies as shareholders. This is a very serious matter because we are trying to fight the issue of conflict of interest. We do not know the owners of companies supplying us with power. The owner who is supposed to be an individual is listed with the Business Registration Services (BRS) as another company. When we asked for details about this company, we found out that it is a shareholder of another company listed in Seychelles. We looked at a chain of almost 10 companies before finding out the rightful owner. We looked everywhere and realized that the address of these people does not exist! Part of our recommendations is that they should no longer operate in this country until and unless we know who they are. It was further noted that the payment structure for most of the IPPs is take-or-pay, which I have already spoken on. We are exposed because our PPAs are modelled in the US currency or the Euro. This is interesting because we should not run away from our own currency to avoid exposing ourselves. Hon. Temporary Speaker, the Committee noted that some of the lines supposed to evacuate power still remain incomplete. I will speak on the recommendation regarding that issue. Hon. Temporary Speaker, there is a lack of approved Land Value Index to specify the amount of compensation. The operationalisation of the land value index is key to making sure that energy projects move. This is because from the conception of an energy project to its completion, people suffer a lot of delays. The actual amount also varies from one area to another and there is no specific reference to refer to regarding the actual cost or how much we should pay as wayleave for our energy projects."
}