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False Claims on Approval by the Energy Regulatory Commission (ERC) of the Lamu Coal Plant

Pictured: Lamu residents hold placards in protest against the Energy Regulatory Commission (ERC) decision to hold a public hearing on the Lamu Coal Power Plant in an area that is inaccessible, December 6, 2016 |REUTERS, Abdallah Bargash


Yesterday Save Lamu  publicized a press release to clarify media reports that the Energy Regulatory Commission (ERC) has not granted a license to Amu Power for the proposed 1,050 MW coal power plant in Lamu County. They informed the public that rather:

“The ERC published a response to Save Lamu’s objection to the issuance of a license to Amu Power. This does NOT mean that a licence has been granted.”

Through the Kenya Gazette notice, no. 1256 of 24th February 2017 , the Energy Regulatory Commission formally rejected the objection filed by Save Lamu and Natural Justice to revoke the license issued to Amu Power to establish a 1,050 MW imported coal power plant in Lamu County. Unfortunately, the media has distorted the news by claiming that the rejection of the Save Lamu complaint is an approval of the project.

According to the gazette notice, the ERC only made a decision to reject the complaint lodged by Save Lamu  in October 28, 2016. The complaint by Save was based on environmental technical and economic issues, which were not comprehensively addressed resulting to a decision that has not only negative livelihood implications but also environmental degradation consequences to Lamu County and Kenya as a whole.

In their complaint, Save Lamu cited Section 30 of the Energy Act concerning: the impact of the undertaking on the social, cultural or recreational life of the community; the need to protect the environment and to conserve the natural resources in accordance with the Environmental Management and Coordination Act, 1999; economic and financial benefits to the country or area of supply of undertaking; the economic and energy policies in place from time to time; the cost of the undertaking and financing arrangements;  the applicant will operate in a manner designed to protect the health and safety of members of the public who would be affected by the undertaking; and, the proposed tariff offered.

Save Lamu’s complaint was disallowed by ERC based on several claims that are misleading but especially that: the Commission heard the objection on 6th December, 2016 in Lamu; that the project affected persons (PAPs) did not object to the power plant and are only concerned on a fair relocation and compensation; that all environmental issues were addressed in the Environmental Social Impact Assessment and effective mitigation measures proposed; and that the issue of livelihoods of the people of Lamu has been addressed in the environmental social impact assessment.

These conclusions reached by the ERC in their gazette notice are invalid since no fair hearing was given to the complainant and other members of the public other than compensation beneficiaries, and that there is still an on-going case under the National Environmental Tribunal over the Environmental Impact Assessment.

Inaccessible Public Hearing

The Commission claims that they heard the objection on 6th December, 2016 in Lamu whereas they changed a public hearing venue at the 11th hour on 6th December 2016, denying members of the public from Lamu County their rights to participate in a constitutional guaranteed process hence infringing residents of Lamu, their rights to public participation, fair administrative action and the right to a fair hearing. The meeting was to be held in Lamu Town but was moved only 2 hours before the meeting was to take commence, to Kwasasi, the coal plant site. The site is quite inaccessible for most Lamu residents other than the landowners who stand to benefit from the compensation of the Lamu coal plant.

Based on the change of venue, the claim by the ERC that the only concern with the plant is on compensation is no surprise if they held the hearing at a site only accessible only to compensation beneficiaries. Unless you have a private boat or vehicle, it costs an average of 3,600 to take bike a boat and motorbike to the site. This is highly unaffordable to the average fishermen who will be most affected by the project.

Since Save Lamu was the main complainant it is concerning that the ERC ignored the groups’ concerns over intimidation that kept those opposing the coal plant away from the public hearing in Kwasasi since the compensation beneficiaries have previously been highly hostile to anyone who opposes the Coal Plant who attends the meeting as the landowners stand to benefit millions in compensation.

Economic Issues

The ERC disallowed the economic arguments on the project and notes that the cost of the project will be recovered through the tariff as contained in the power purchase agreement. This has been one of the biggest concerns for Save Lamu and the ERC response confirms the organisations fear. This is the fact that Kenyan citizens will have to pay for the cost of the project whether or not we utilize the power. Since the project is based on projection of future electricity use and exaggerated power needs, the taxpayer is basically the one who will pay for the project cost.  This argument has been made very well by former ERC chair Hindpal Jabbal , an expert in the field.

Furthermore, this contradicts a similar decision by the Ministry of Energy in the same month to reject a bid on a 600-megawatt wind project in the Indian Ocean waters bordering Malindi.

The government cited concerns over that size could have put pressure on electricity bills, whereas the coal power plant is to produce 1,050MW and therefore will put even more pressure on electricity bills. Several wind power projects in Lamu have stalled due to government bureaucracy at the expenses of Kenya’s path to achieve sustainable development.

Environmental issues

ERC claims that the environmental issues were addressed in the Environmental Social Impact Assessment and effective mitigation measures proposed. This conclusion is also surprising since there is currently on-going stay order by the National Environmental Tribunal on the project after Save Lamu filed complaints on the Environmental Impact Assessment of the project concerning ineffective mitigation measures. Considering that the NET is better placed to determine environmental issues, the ERC should have reverted this determination to the appropriate body and waited until the stay order was lifted.

In conclusion, how can the ERC claim to have met the public when they only met locals, who stand to benefit financially from the plant when it’s being constructed, and not fishermen, businessmen and the tourism community who will also experience the consequences when the plant is operational?

How can the ERC claims to have heard the concerns over the project when yet the hearing was only for people in Kwasasi and no time was given for other Kenyan citizens to attend?  The ERC wrongly defines the Project Affected Persons as only those who live immediately near the project site ignoring the fact that all Kenyans will be impacted by tariff changes and all Lamu residents will be impacted by changes in the marine and air quality.

The right to comment to the public hearing was for every Kenyan, and the ERC failure to identify an accessible and safe venue for all was a clear plan to keep opposition away from the hearing.