Below is the latest response from KLM. Advice on how to proceed?
I have taken this opportunity to review your claim and can confirm that the flight concerned was delayed due a last minute auxillary power problem. A technical issue like this, that is encountered unexpectedly, which presents itself beyond our scope of influence and is a threat to flight safety, can be regarded as an extraordinary circumstance and therefore is not one here there is an entitlement to compensation under EU regulations.
I can assure you that all reasonable measures were taken in order to minimize the impact of this delay, including contacting passenger in advance when and where possible, providing all care and assistance due and arranging alternative flights.
We have thoroughly reviewed your claim and have taken into account all involved details of this specific flight delay. As a result, we must respectfully decline your request for legal compensation once more.