Kenya Power raises alarm as unpaid power bills hit Sh29 billion

Kenya Power has raised an alarm over growing cases of failure by individuals, ministries, counties, private companies and parastatals to pay their electricity bills.

Power users owe the company, which earned Sh144.1 billion in revenue in the year to June, Sh29.66 billion in unpaid electricity bills, indicating that the firm’s earnings would have been significantly boosted by settlement of the bills.

This is a Sh2.26 billion increase from Sh27.39 billion worth of unsettled power bills last year, showing that consumers are struggling to keep pace with rising electricity prices.

Official data shows the cost of 50 kilowatts (kWh) of electricity has risen 14.27 per cent over the past year to Sh921.45 last month up from Sh806.37 last year driven by increase in fuel prices and a weakening shilling.

The finance and risk committee of the company’s board said the unsettled customer bills are the biggest risk to the firm’s its financial position.

Other risks it cited include market risks such as changes in power demand by customers, currency fluctuation, and liquidity risks arising from the company’s rapid expansion of its network and a heavy debt-load.

However, Kenya Power says it will step up use of strategies that have proven successful before to make its customers clear their bills, including disconnecting power supply.

For instance, the firm switched off electricity supply to City Hall for more than a week in October over a long-standing dispute concerning a Sh1.5 billion power bill the county owes.

This effectively shut off water supply, grounded lifts and stalled office operations.

Kenya Power’s earnings from electricity reconnection charges also nearly doubled to Sh552.5 million up from Sh252.3 million last year, indicating the company has gone full throttle on disconnecting users who won’t settle their bills.

“The following strategies are currently in operation and are largely successful in other high-risk areas of non-paying customers (including) disconnections, use of debt collectors, focus on early identification and letters of demand,” said Kenya Power in its latest annual report.

The power distributor has also been aggressively rolling out prepaid meters, which automatically go off when the purchased power runs out.

However, the utility firm acknowledges that some of the unpaid bills will never be paid.