Why Kenya Power won’t succeed in its present form

Kenya, East Africa’s largest economy, remains an electricity supply minnow with a low penetration level of about 15 per cent that is inefficiently managed.

Electricity distributor, Kenya Power, still has 85 per cent of the population to cover — a herculean task given the fact that the population itself is continuously growing at an annual rate of about three per cent.

Power outages have become the norm especially in recent weeks with the onset of long rains. It must worry all of us that such a strategic national agency has been allowed to adopt gross inefficiency as its mode of operation. The question is what would happen if it were to cover the entire population.

A mere look at the very basics of power consumption — the ON and OFF switch at home — demonstrates just how much damage these outages cost the economy. One needs no engineering knowledge to fathom this.

Kenya’s electricity ecosystem is made up of the Energy Regulatory Commission, Kenya Electricity Generating Company (KenGen), the Kenya Electricity Transmission Company (KETRACO) and Kenya Power — the distributor.

Of the four agencies, the expectation must be that Kenya Power should be the lean and most efficient one given that the others are its offshoots. 
The irony is that Kenya Power’s profitability remains at levels that are normally only possible with the most robust and efficient organisations in Kenya.

That such a disastrously inefficient business is able to announce billions of shillings in profit only allows it to sit in a comfort zone where it does not belong. Any organisation that occupies this sort of space, hardly changes. The fact is that only a monopoly can afford to be inefficient and remain profitable.

If consumers had choices Kenya Power would pay the price of inefficiency and find a way of dealing with it. But it does not because it suffers no pain for its incompetence in performing the role for which it was created.

The role of an electricity distributor is pure and simple; to ensure reliable supply of power to the consumer. This means, that whatever activities the company engages in must be designed to ensuring that consumers are supplied with electricity as and when they need it.

Looking at Kenya Power, the reality that confronts one is the extent to which the company’s core competencies are far removed from its core business.

The company’s emergency teams are only so by name, leaving thousands of consumers without power for days whenever there are operational hiccups. If these emergency teams were serving hospitals, thousands of people would have died way before their time. Kenya Power is purely about resisting change.

Take a look. The company’s transformers are regularly vandalised for the oil which has become a major cause of early deaths because it is sold to eateries and used as cooking oil.

Kenya Power owes it to the citizens of this country, under its corporate social responsibility agenda, to switch to modern transformers that do not have oil lest they continue to supply unreliable power and ingestion-related ailments.

Many of the unsuspecting consumers of transformer oil are Kenya Power’s customers whose deaths rob the company valuable customers and the country productive minds. It is in the interest of every company that the customers happily consume its services, not the services consuming the customers, as stolen transformer oil is being allowed.

Throughout the country, the very well-marked Kenya Power vehicles suggest that all teams are well equipped. Electricity by its nature also requires well trained technicians.

If these two points hold any water, then the Kenya Power management must ask why these teams are unable to cope with the operational emergencies in its ecosystem.

What keeps the drivers from taking technicians to the emergency sites on time? The answer must only lie in the fact that there are no consequences for not responding to these challenges outside the acceptable time frames.

Kenya Power vehemently denies it, but the fact is that many consumers have to literally bribe the company’s staff to restore power in their neighbourhoods or houses.

To most Kenya Power employees, real emergencies are only those that are reported by a Very Important Person. In such situations the technicians move with good speed — the kind that should be the norm in any competitive organisation. Such glimpses of good speed, should give us hope that things are not beyond correction.

But in the interest of the economy and their own long-term survival, Kenya Power employees must wake up to the fact that first class service must not be delivered only out of fear of consequences from VIPs but because it is the core of their business.

Ultimately, one may ask what purpose a handsome profit serves this company when some ugly poles are falling because of old age. Poles do not get old because the regulator or KenGen did not do its part! Over time, an accumulation of old pylons in the grid make the profits artificial.

It all points to the fact that the power distributor is doing a less satisfactory maintenance job, leaving overgrown trees hanging over live wires and falling over them to cause short-circuiting. 

For the regulators, perhaps it would in the interest of efficiency and fairness to insert into Kenya Power’s contracts with consumers a clause that brings consequences to bear on the supplier whenever unexplained or preventable outages occur.

This is because to the consumer, many of the things that the power supplier fails to do amounts to economic sabotage. Less revenue for businesses means lesser taxes for the government and less development money for the country.

The journey to Vision 2030 must begin with Kenya Power satisfying the 15 per cent of the population it has connected to the power grid then working systematically to cover the rest.

The government must also show impatience with the status of electricity supply in the country and think about opening up the market for additional players.

Mr Mugun is the Author of the books ‘How to Undo Life’s Airlocks’ and ‘10 Critical Success Answers for SMEs’ and Director of Special Projects at Strathmore Business School.