Full in-tray for new Kenya Power CEO

Silhouette of engineers workers at electricity station. [Getty Images]

All eyes in the energy sector are on Joseph Siror. Perhaps not just the energy sector but the entire country.

Dr Siror has just been appointed the seventh Kenya Power Chief Executive in seven years.

The new occupant of the corner office on Stima Plaza’s seventh floor has the attention of everyone in the energy sector from State-run sister agencies and independent power producers to small businesses.

He is also on the radar of both the small, consuming less than 100 units monthly, and large power consumers, whose bills run into hundreds of millions of shillings.

Dr Siror takes office at a time when staff morale is possibly at an all-time low and the firm’s brand equity just like its share price has been significantly eroded and power outages have been on the rise.

The fact that he joined a month after the Energy and Petroleum Regulatory Authority (Epra) hiked the cost of power does not help endear him to customers.

Despite what seems like an insurmountable job, Dr Siror believes he is up to the task. He says Kenya Power will no longer be pushed around by the State and cartels in the industry.

“Everything rises and falls with the chief executive officer,” he said on claims of staff being pushed to bend rules by “external forces” as well as having rogue staff who willingly play along with the cartels.

“The challenge is when you get a chief executive who can succumb [to pressure]. No staff of mine would go through such. They (external entities) would have to deal with me first… I would have to exit before they do... I will stand with them as long as they stand with that which is right.”

Dr Siror leaves the relative comfort of the role of the general manager technical services at Kenya Electricity Transmission Company (Ketraco).

“I fully understand the impact of Kenya Power on the economy. If there is one institution that can turn around the economy, I believe that it is Kenya Power. Electricity plays such a critical role in an economy that if you mess it up, even if you tried your best in other sectors, you would still encounter the challenge,” he said.

“When you mishandle power, the adverse impact is massive and likewise when you handle it well, the impact would be massive.”

While still relatively new at the firm, Dr Siror is eyeing three areas that he thinks will put Kenya Power on a firm footing.

These are growing power consumption, increasing efficiency within its operations and taming system losses.

While he is non-commital to reducing power prices, he notes working on these shortcomings will eventually yield a lower cost per unit of power.

“The moment we start driving up the demand, then there are more units to respond to the capital return,” he said on increasing demand for power.

“With time, the initial investment is repaid and we bring down the tariff. For instance, for Olkaria One, the capital expenditure is paid up, and we get a unit at Sh1 from Olkaria One,” said Dr Siror, adding that as more plants mature and investors recoup their investments, this will be factored into the pricing of power and factored into the electricity tariff.

“The key is a return on investment for the players in the power sector. If the demand is low, it is this low demand that must enable the investor to recover his investment. If you increase the demand, you now have more units to recover that investment,” he explained.

Dr Siror said the firm is deploying different strategies aimed at reducing the commercial aspect of the system losses that currently stand at 22.4 per cent.

The extent of the losses means that when the firm buys 100 units of electricity from power producers, about 22 are lost during transmission owing to the nature of transmission equipment as well as theft by consumers, in some instances aided by the company’s staff.

Kenya Power, he said, is working with Ketraco to address the technical aspect of the system losses.

He said his experience in the power sector has equipped him with the requisite skills needed to steer the firm.

Dr Siror previously worked with the Kenya Posts and Telecommunications Corporation (KPTC), the National Economic and Social Council (Nesc) as director of science, Firestone East Africa, the Kenya Revenue Authority (KRA) and most recently Ketraco.

He is credited for leading the team that automated KRA, including the introduction of cargo tracking when he was the Manager of Information Systems.

Dr Siror has a doctorate in Engineering from Shanghai Jiaotong University (China), majoring in Radio Frequency Identification (RFID), a Master of Business Administration (MBA) degree and a Bachelor of Science (BSc) in Electrical Engineering degree from the University of Nairobi.

He said he is well aware of the challenges that Kenya Power has endured, emanating from the firm’s leadership that failed to steer the firm in the right direction and government interference.

The latter has partly played a role in the firm getting into projects that are detrimental to its financial health.

“Kenya Power has an excellent capacity. What has been lacking is an enabling environment. This enabling environment can only be fostered by somebody who is not self-seeking and who has no other interests,” said the new CEO.

“It is those other interests that create a poisonous environment, so the performance or failure is not so much because of lack of capacity but because the environment was toxic. I believe that I will provide that enabling environment.”

He also noted that some of the firm’s problems, particularly financial, can be traced to the government’s Last Mile Connectivity Project and last year’s tariff reduction that brought down the cost of power by 15 per cent. The company is owed Sh1.52 billion by the government for the delivery of the Last Mile Connectivity Project, according to disclosures in its latest annual report.

Dr Siror notes that the project has been a drain on the company’s resources and at some point, it was forced to borrow commercial loans to enable it to push through with the project. These are among the debts that the firm has been trying to restructure.

The impact of the Last Mile Project has been the surge in the number of people connected to the power grid, making Kenya among the countries with the highest rates of connectivity. But this has come at a heavy price as they have not translated to higher revenues, with the company depending on its commercial and industrial customers for much of its revenues.

“Fifty per cent of revenues come from about 4,000 consumers,” he said.

Out of the nine million customers that Kenya Power had at the end of the financial year to June 2022, about 4,000 were large commercial and industrial customers.

According to its annual report, these customers categorised as commercial and industrial, paid the firm Sh80.26 billion, which is about half of the Sh167.9 billion total revenue for the year.

The presidential directive in December 2022 for a 15 per cent drop in power prices also hurt the firm’s revenues.

The plan was to have the rest of the industry contribute to the reduction, with the State-owned power agencies giving Kenya Power a discount on the sale of electricity.