Ketraco, Kenya Power haggle over Sh39m costs of blackout

Staff from Kenya Power Company and Kenya Electricity Transmission Company move in to repair one of the four electricity towers along that 220kv Loyangalani-Suswa line that collapsed in the Longonot area of Naivasha cutting off the electricity power supply to the national grid. [Antony Gitonga, Standard]

The Kenya Electricity Transmission Company (Ketraco) and Kenya Power are passing the buck over who should bear costs associated with collapse of the transmission line between Marsabit and Suswa.

The transmission interruption that lasted 16 days cut out electricity supply from the Lake Turkana Wind Power (LTWP) plant.

The line went down after four towers collapsed at Longonot on December 16 and was not restored until January 1. Kenya Power had to ration power during peak hours.

A report by Ketraco’s management to its board said the collapse of the giant steel structures was caused by unusually strong winds.

The transmission line was restored on January 1 but temporarily, with the company at the moment evaluating modalities of permanent restoration.

Ketraco now claims that Kenya Power (KPLC) has demanded that it pays for Deemed Generated Energy (DGE).

DGE is electricity that LTWP was capable of generating but could not as it would have nowhere to take it due to lack of transmission infrastructure.

“KPLC subsequently wrote to Ketraco stating that Ketraco would have to meet the transmission infrastructure interruption DGE estimated at Sh39.09 million per day if the interruption lasted beyond December 31, 2021,” reads the January 19 report by Ketraco to the board’s committee on finance, strategy and risk.

“Neither the interconnection agreement nor the coordination agreement obligate Ketraco to make transmission infrastructure interruption (DGE) to KPLC or LTWP as a result of the collapse of the four towers in Longonot.”

It said there was no obligation on Ketraco to commit or make such DGE payments “as such obligations only exist in the PPA (power purchase agreement) entered into between KPLC and LTWP to which Ketraco is not privy.”

The committee said Ketraco is only obliged to ensure minimal interruptions but the interconnection agreement with LTWP does not specify the minimum duration for the transmission infrastructure interruption.

While it might not be required to compensate the wind farm owners for the losses incurred over the 16 days that they could not sell electricity to Kenya Power, Ketraco will have to fork out more than half a billion shillings to permanently restore the line.

Ketraco’s management in a separate report to the board’s technical committee looking into modalities of getting a contractor to restore the transmission line noted that the line would be permanently restored at an estimated cost of $5.53 million (Sh553 million).

“Immediate efforts were put in place to mitigate the transmission interruption. Temporary restoration by connecting a single circuit was completed on January 1, 2022,” said the report.

“Permanent restoration will be done to restore both circuits once a contractor is identified.”

In the report, Ketraco requests the board to allow the company to use the specially permitted method of procurement in the recruitment of a new contractor to restore the transmission line permanently.

The management said that while it would take only 45 days to get a contractor using the specially permitted procurement method, it would take nearly a year to hire a contractor using the open tender method.

The lengthy search process presents a risk as the temporary installations currently supporting transmission lines might give in.

“It is in the national interest that the special method of procurement is employed to fast track the procurement of a new contractor to permanently restore the Loiyangalani-Suswa line,” said the firm.