Let Kenya Power style up

Kenya Power posted a net loss of Sh1.1 billion for the half-year ended on December 31, 2022. The electricity distributor says it will incur a further loss of Sh6.5 billion owing to the government’s decision to extend a 15 per cent cut on electricity tariffs for three months to April.

The tariffs were slashed in January last year to lower the cost of living. A further 15 per cent that was to be saved through renegotiation of power purchase contracts with independent producers failed to materialise.

While it is understandable that the lower tariffs have been eating into its revenues, the utility firm has to do better. For, quite apart from the fact that it is a monopoly, official data indicates that it cannot even satisfy local demand.

Not only have investors been moving to other countries due to the high cost of doing business here, a key plank of which is the cost of power, but some firms around the country have also had to generate their own electricity due to the unreliability of the power supplier.

The utility firm has also failed to heed calls to make it easier for small-scale players to produce and sell electricity to the national grid. Frequent power outages and high costs, coupled with failure to prioritise the acquisition of electricity from such affordable sources as KenGen, point to the need for Kenya Power to streamline its operations.

Kenya Power ought to reduce system losses and weed out the labyrinthine layers of middlemen that make power expensive. The argument that it is slipping back to loss-making due to reduced tariffs just won’t wash. As a matter of fact, the country needs to lower the tariffs even further to enhance the ease of doing business and attract investment.

The utility must get its act together, or else conversations should start on ending its monopoly.