Kenya Power was this month given more room to bill consumers the additional losses it incurs for electricity bought from generators such as KenGen. FILE PHOTO | NMG Consumers will pay an additional Sh1.7 billion annually to Kenya Power for electricity thefts and leakages from an ageing transmission network.
Kenya Power was this month given more room to bill consumers the additional losses it incurs for electricity bought from generators such as KenGen that does not reach home and businesses, technically known as system losses.
The Energy and Petroleum Regulatory Authority (Epra) last Friday reviewed consumer tariffs and allowed Kenya Power to recover system losses equivalent to 19.9 per cent of power it buys from generators from users, up from 14.9 per cent.
The Ministry of Energy reckons that the regulatory move will increase consumer retail prices by Sh0.20 per kilowatt hours (kWh).
This will increase consumers’ annual payment to the utility firm by Sh1.77 billion based on the 8.84 billion kWh that homes and businesses consumed last year.
Consumers last year paid an estimated Sh4.24 billion on system losses at the earlier level of 14.9 per cent, meaning that the additional charges will push the burden to Sh6 billion.
"Epra has made amendments to Gazette No 8043 of 2018 in respect of the schedule of tariffs, charges, prices and rates to be charged by the Kenya Power Company to consumers of electrical energy," said Epra in the latest Kenya Gazette notice.
"Target system loss factor in transmission and distribution is amended from 14.9 per cent to 19.9 per cent effective July 1, 2020."
Kenya Power’s latest annual report puts the power losses at 20.5 per cent for the year to June 2018.
The extra losses translated to an annual loss of about Sh3.06 billion, which is more than 10 times the Sh262 million profit Kenya Power returned in the year to June 2019.
The Kenya National Bureau of Statistics (KNBS) placed the losses at 23 per cent for the year to December, and well above the global benchmark of about 15 per cent.This means that losses above 19.9 per cent translates to lost revenues for Kenya Power given the firm shoulders revenue leakages above the regulatory limit.The combination of power theft and leakages from the ageing transmission grid, which stems from the long period of under-investment, has continued to keep the system losses beyond the initial target of 14.9 per cent.The inefficiency in the power flow system happens […]
