Kenya Power to move all customers to prepaid system
By Macharia Kamau | December 20th 2012
By Macharia Kamau
Kenya Power plans to move another 250, 000 of its customers to the pre-paid meter billing system over the next one and a half years. The exercise that will run throughout next year and the first half of 2014 is expected to cost Sh2.5 billion.
As of June, the firm had installed 164,000 pre-paid meters for some of its customers in Nairobi. The firm plans to have all its retail customers moved into the new system by 2015. Kenya Power has two million customers as of June.
The stepping up of efforts to install more pre-paid meters is despite unresolved issues that have been raised by electricity consumers that were moved to the new billing system in the initial phase. These include inadequate systems to handle reload requests from consumers, and apparent disparities in billings between the old and new systems.
“We want to increase the number of our customers that are on pre-paid meters by 50,000 by the end of this financial year and by another 250,000 by the end of the next financial year,” said Kenya Power Chief Executive, Joseph Njoroge.
It costs Sh10, 000 to install one prepaid meter, which Njoroge said was absorbed by the firm, but noted that it came with a huge cost cutting for the firm as well as reduction in the number of customers that default on their bills.
“We do not charge the customers for the installation of the kits but the benefits are huge. We expect the operational costs that come with meter reading to go down, improve our customer care, better financial management and reduction in the levels of bad debts,” he said. Customers that have already been migrated to the new billing system have raised concerns that include slow processing of tokens on the payment platforms used to purchase them.
Other complaints lodged by consumers include seemingly higher charges on the new billing system compared to the post-paid system.
Under the prepaid billing system customers buy tokens and load them on to their meters before commencing use.
This is unlike the post-paid system when consumers use power and then pay for it later. Njoroge was speaking at the firm’s annual general meeting in Nairobi yesterday.
During the AGM, shareholders approved a final dividend of 30 cents, which is in addition to 20 cents interim dividend – bringing the total to 50 cents payable to shareholders that will be on the firm’s share register on February 28.
Its next strategic plan running over the next five years, Njoroge said Kenya Power would will be looking for Sh40 billion that will mostly be used in grounding its network of transmission lines in major cities and towns across the country.
He said the money will be sourced from a mix of international and local lenders – and if need arises, the shareholders.
He decried vandalism of both transmission lines and transformers, noting that it cost the firm in excess of Sh1 billion every year.
A recent amendment to the energy act has harsher punishments for vandals. Convicted vandals get to pay Sh10 million fine or serve a ten-year jail term.
Njoroge noted while this is expected to deter vandals, Kenya Power is pushing for life sentence for people convicted of vandalising power cables and transformers.
“Vandalism has been depleting a lot of our resources... we are losing in excess of Sh1 billion annually as a company due to vandalism on transformers. This is in addition to the cost on the economy that happens when power goes out that we estimate to be at over Sh5 billion,” he said.
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