By James Anyanzwa
Electricity consumers may soon be able to pay their electricity bills from their own bank accounts, should a proposal by electricity distributor, Kenya Power and Lighting Company Ltd (KPLC), be effected.
The move is the latest in a series of customer service reforms that the utility firm has undertaken to cut operational costs and lower rates of default.
Under the direct debit system, debts owed to KPLC will be paid directly from the customers’ bank accounts once they are due.
The mode of implementation, however, remains unclear since it requires the consent of the customers.
Avoid disconnection
Mr Joseph Njoroge, the company’s managing director and chief executive, says the system, if implemented, will protect the company from additional costs linked to disconnections.
"It will help us avoid costs associated with disconnections. It is never in our interest to disconnect anyone but it is inevitable since we have to make good of our costs which we incur," Njoroge said last week
An employee of KPLC insulates an electricity line. KPLC wants customers to pay their power bills straight from their accounts . Photo: Courtesy |
Over the last few of years, KPLC has undergone a considerable restructuring process aimed at turning the previously loss-making monopoly into an efficient enterprise, capable of providing high quality services to its clients.
These days, Customers can receive their electricity bills over mobile phones Short Message Service (SMS) and settle the same at numerous, and ever increasing, outlets including retail supermarkets all over the country.
The establishment of the State-owned Geothermal Development Company (GDC), is also expected to provide another window of opportunity for KPLC to purchase power at considerably lower prices, in comparison to the weather dependent hydroelectric power.
It is argued that although KPLC is poised to lose prospective clients in future to the new electricity transmission company—KETRACO— due to the separation of transmission from distribution roles, it will continue accruing consistent revenues from maintaining, and managing, its current transmission infrastructure.
KPLC is expected to retain ownership of existing transmission infrastructure, while the new publicly owned Transmission Company will build new transmission lines.
KPLC has so far transferred 8,000 electricity consumers to the pre-paid meters and the number is set to grow to 25,000 by the end of the year and rising to 250, 000 in the next 12 months.
The new system is part of the customer service reforms the company has been implementing to improve metering, billing processes and reduction of system losses.
Under the pre-paid system, electricity consumers will buy cards before hand to top up their meters before expiry of their credit to avoid automatic disconnection. The new meters that use smart cards are bought from KPLC and loaded with the amount of credit purchased.
The card will be inserted in the new meters, which subtracts the points according to consumption.
The new meters show consumption rates enabling consumers to manage their expenditure and spare them disconnection or reconnection costs.
Currently, consumers can only access the cards from KPLC banking halls and three Uchumi Supermarkets, but increasing access points a critical plank in the success of the pre-paid metering, now that the power firm is planning a massive rollout.
Installations are being carried out beyond the 25,000 existing ordinary customers within Nairobi in the areas of Kasarani, Fedha Estate, Imara Daima, Villa Franca, Nyayo Embakasi Estate, Nyayo Highrise, Kibera, Woodley, Mountain View, Muguga Green, Hirani, and Kahawa Sukari.
Reported figures show the system will enable the power utility firm to save more than Sh1 billion in operational costs and save consumers from the hassle of long queues when paying bills and reconnection fees.
A South African company Actaris Measurements & Systems (PTY) , which beat six other firms for the contract to supply the pre-payment meters and software in the February 2009 tender, has been contracted to roll out the project.
The others were Saabgintec PTY Ltd, Landis Gyr, Krishna Enterprises UAE, Conolog SA and Chidhya K Ltd representing Insyte Instalaciones of Spain.
KPLC posted a 75 per cent growth in pre-tax profits for the full year period ended June 30 2009.
Its profits before tax (PBT) grew to Sh4.8 billion from Sh2.7 billion in the previous year.
Electricity revenues increased by 52.4 per cent, to Sh36.4 billion from Sh23.9 billion, mainly due to the tariff increase effected from July 2008, gains from reduction in system losses and enhanced operating efficiency.
Improve power supply
The impressive performance resulted from heavy investment made during the year to improve the quality of power supply to the economy and to facilitate accelerated connection of new customers.
Fuel cost recoveries however increased 72 per cent to Sh28.2 billion from Sh16.4 billion mainly as a result of drought which prompted scaling down of hydro generation in favour of thermal generation.
The fuel revenue recovered from customers is paid directly to thermal based bulk power suppliers and does not constitute an income to KPLC.
The non-fuel power purchase costs increased by Sh6.8 billion, to Sh18.7 billion from Sh11.9 billion, as result of the implementation of the new power purchase agreements with KenGen and other generators during the period under review.
In the last three years KPLC invested extensively in power system upgrade and reinforcement in order to improve the quality of power and increase the customer base.
janyanzwa@standardmedia.co.ke
