There is already a great answer quoting from the aircraft flight manual, but I thought I would offer some additional perspective. I'm not qualified in the Kodiak, but both the T-34C and C-208 have versions of the venerable Pratt and Whitney PT6 turbine engine, and both have Emergency Power Levers like this in case the Fuel Control Unit (FCU) fails.
Older (non-FADEC) turbine engine FCUs are electro mechanical, and meter fuel according to several inputs; typically RPM, turbine temperature, demand, (per power lever position) and probably a pressure sensor somewhere. With a failure of the FCU the engine will still run, but the metering function no longer works and the RPM will roll back to idle.
This is when the Emergency Power Lever comes into play: Once engaged the EPL bypasses the FCU and gives you manual control over a valve to add fuel to the engine to increase or decrease power output. However, without the other sensor inputs you lose the governing protection of the FCU. Instead of the power lever being just one input to be considered by the FCU to change a power setting, you are now directly controlling the fuel flow going to the manifold.
The way it was explained to me was to imagine your car's carburetor or computer controlled fuel injection system failing: Instead of venturis, needle valves, jets, etc. keeping a uniform fuel mist flowing into the cylinders, you are now keeping it running down the road by carefully and slowly pouring gas from a spouted measuring cup directly into the intake manifold.
Needless to say you must be very careful using EPL to dump raw fuel into the burner like this or you can easily overtorque the engine or toast the turbine section. In Navy flight training they had us fly an approach in the simulator using the EPL and it was VERY sensitive. You really had to keep an eye on the max turbine temperature and move the EPL very gingerly to avoid exceeding limits.