Power Company to Explain Frequent Electricity Losses

Mwaniki Wahome

19 July 2011

Nairobi — Kenya Power will have to explain its various system losses before it gets a nod for review of power tariffs.

The regulator, Energy Regulatory Commission, Tuesday said the power utility firm will have to account for inefficiency in its systems that result in power leakages.

Such losses are loaded onto consumer bills.

Last month, Kenya Power requested a 25 per cent increase in tariffs — after a three-year period as stipulated by the law, in this case by June 30, 2011. The last review was in July 2008.

“We shall be challenging Kenya Power on system losses. The situation has been improving for Kenya Power since the review of 2008 and they have raised revenues in the past three years. A review will be necessary to ensure the projects they have are not affected,” said Director General Kaburu Mwirichia.

Meet the high demand

Briefing the media in Nairobi, Mr Mwirichia said review of the tariffs could take several months and will involve other stakeholders.

He said the 2008 review was based on the projects that Kenya Power was undertaking, adding that the power firm would encounter difficulties in meeting the requirements of new projects if a review was not done.

Kenya Power justified the new tariffs, saying, the government wanted to connect more people by 2020 and meet the high demand for electricity arising from a fast-growing economy.

The utility firm said a review was needed to enable it to procure additional power from existing generating firms and from new ones, which are commissioned to set up plants.

But ERC rejected the review, as protests mounted from consumer organisations which argued households and businesses were already paying high bills for electricity.

Communication from Kenya Power at the time said the decision was made after consultation with the Ministry of Energy and the regulator to postpone the review, citing “the current serious unfavourable social and economic circumstances in the country.”

Consumer organisations said increased tariffs would lead to high commodity prices.

The company, which re-branded recently, has encountered various difficulties since then, with blackouts becoming more frequent.

Kenya has among the highest power costs in Africa. This has negatively affected the competitiveness of local products against those from countries such as South Africa and Egypt.

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