Electricity provider should up its game

A couple of years ago, we hosted a Pan African conference in our Nairobi office. During one of the catch up sessions, Kenyans present started complaining about bad traffic, corruption, unpredictable weather and everything else under the sun.

Some Nigerians who were part of the team, however, felt the locals were too harsh on their country. They said Kenyans were fortunate to live in such a quiet city.

Since most of us remembered how discomfiting it was to live with the constant din of generators in the background as is commonplace in Nigeria, we reluctantly gave half-hearted props to Kenya Power.

We were then rewarded with a blackout that lasted the rest of that evening and into the next morning. At the end of it all, the West Africans felt right at home (not in a good way) after the generators kicked in.

The KPLC jokes flew hard and fast, as if this was in some way going to send a message to some supernatural being to restore the light.

I remember a time, not too long ago, when power blackouts were the order of the day. When we had constant power rationing, and were at the ultimate mercy of KPLC, which had been nicknamed ‘Kenyans Please Light Candles’.

A time when manufacturing and other industries relying heavily on power made multi-million shilling losses in the course of business, when our home electronics would meet their untimely demise, thanks to power surges every time power flickered back on.

We seriously considered lodging a class action suit against the power provider.

A few things have changed since. In a bid to revamp its beleaguered image, the utility firm changed its name from Kenya Power and Lighting Company to Kenya Power.

Kenyans, ever so funny, contended that ‘lighting’ was struck off so that they wouldn’t be held responsible for any more darkness and blackouts. But jokes aside, a few things have changed for the better, and for that Kenyans are a (temporarily) grateful lot.

Quick Resolutions

We no longer experience day-long blackouts and faults are responded to a tad faster than previously. Some local contact centres also pick clients calls and log issues with a bid to getting quick resolutions.

Note I said some. Others just don’t care. But of note is there is a listed Kenya Power number that goes straight to an individual who claims to have no affiliation to KPC. You need to sort this out, customer service.

During the rebranding exercise, then CEO said it was in its ongoing ‘commitment to delight the customers’. I am afraid that I am far from delighted. In fact, I have mixed feelings and I will explain why.

Year after year, Kenyans have continued to pay one of the highest average tariffs in Africa. It is no wonder then that this is one of the biggest contributors to the high cost of living. Expensive electricity is the leading cost of inflation, second only to food prices, not vice versa as Kenya Power would like us to believe.

However, high food prices are partly as a result of expensive power, especially where there is value addition through processing.

As Kenya continues its downward slide on the ‘Doing Business’ report, it is important to note that a number of major manufacturing companies have moved their operations to Egypt, South Africa, Rwanda and Mauritius citing high costs of power as one of the main determinants.

This means that the country’s competitive advantage is being eroded, along with a significant loss of jobs in the sectors.

And yet, even with this focus on the industry, the power distributor seems not to be doing much to change the situation. In fact, it has continued its contribution to making Kenya one of the most expensive and prohibitive places  to do business. Nothing goes beyond paying lip service.

In June this year, there was a report that talked of the national grid being expanded, thanks to additional power being generated by the Geothermal Development Authority.

Additionally, an already generated 140MW from the Olkaria geothermal project was expected to ease the cost of power.

Instead, Kenya Power announced yet another increase in tariffs, one more blow in a long line of broken promises. Apparently, the reasons often cited in these increases are foreign currency fluctuation and increases in the global price of diesel, both of which are related.

From where I sit, this does not make sense. I understand having to factor in forex fluctuation adjustments every once in a while but not always. There is a reason why firms that are heavily diesel-reliant use tools like hedging and options.

If you continuously have to suffer the changes in the global oil and currency prices then your executives are clearly sleeping on the job.

I think that as a distributor, Kenya Power is misusing its monopoly and there should be a conversation around licensing more distributors. While we continue to pay through the nose for power, the fact that there are no tangible efforts being put to improve the national grid or the efficiency of the transmission network.

And if indeed there are efforts, the ripple effect should be trickling down to consumers. The culture of arbitrarily hiking prices for essential commodities without any recourse or explanation to the consumer must stop.