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Inefficiencies to cost Kenya Power billions in lost revenue

Kenya Power Company personnel work on a power line at Tetu in Nyeri on February 2,2018. There has been numerous complainants from consumers about the wrong billing.Some consumers now want the company to give them the accurate billing without disconnecting their supply after received an estimated wrong billing . [Photo:Kibata Kihu/Standard]

Kenya Power will shoulder a bigger burden for operating old power transmission infrastructure that has led to high system losses.

This follows a downward review in the amount that the power distributor can recover from its customers for system losses.

The Energy Regulatory Commission (ERC) said it had reduced the amount of system losses that Kenya Power can recover from its customers.

The regulator on Monday said the company would now recover 14.9 per cent of system losses, down from 15.9 per cent previously. The utility firm will have to absorb system losses above 14.9 per cent. The losses are the difference between what Kenya Power buys from power producers and what it sells to consumers.

In the year to June last year, according to the firm’s annual report, system losses stood at 18.9 per cent, meaning it was above the target that had then been set at 15.9 per cent and may have cost it billions of shillings.

Pavel Oimeke, the director general of ERC, said the company would need to devise ways to be more efficient to stem the electricity losses that happen during evacuation from producers to consumers. “This means that Kenya Power has to be more efficient and they will have to meet anything above that from their bottom line,” he said.

New tariffs

System losses have over the years averaged around 18 per cent. They are factored in the power tariffs, enabling the power distributor to recover the money from consumers.

ERC published the new tariffs on Monday, kicking up a storm from consumers following increased costs for some categories of domestic power users who had expected a reduction in their bills.

In addition to old and inefficient power transmission infrastructure, other factors that lead to losses include the distance between the electricity generation source and the consumers.