Inside Kenya Power’s fresh turn to tame bill defaulters

Loss-making Kenya Power #ticker:KPLC has hired eight debt collectors to help recover outstanding bills running into billions of shillings and improve its cash position.

The State monopoly says it is also installing smart meters to its customers around the country to improve billing and curb the menace of power theft.

The move is part of the electricity distribution new strategy to net defaulters and root out electricity thieves using illegal connections to the national grid to deprive the company of revenue as it seeks to lift itself out of a deep earnings slump.

“Our short-term priority is to stabilise the company’s cash position in order to provide it with a platform for recovery and growth through paying close attention to costs including sealing loopholes that facilitate financial haemorrhage improving revenue collection and working to improve service delivery,” Kenya Power chair Vivienne Yeda said yesterday during the company’s annual general meeting.

Kenya Power managing director Benard Ngugi said they have assigned meter readers, revenue collectors and installation inspectors to specific zones under a revamped county structure and brought on board eight Private Debt Collectors (PDCs).

Mr Ngugi said Kenya Power would supply smart meters to 55,000 small and medium enterprises (SMEs) across the country and its large customers in a project that seeks to boost efficiency.

“We are rolling out smart meters for all large power customers and SMEs. Currently, 6,818 out of 7,802 large power customers are on smart meters.

“We have also extended the project to SMEs, with an initial target of 55,000 customers,” he said.

The new metering system gives customers access to real-time information on their consumption patterns and billing, allowing them to assess their energy usage through an online customer portal, said Mr Ngugi.

The plan to meter all its transformers across the country will help the utility firm to identify specific transformers affected by the theft and close in on homes benefiting from stolen electricity, he said.

“Installing border, feeder and transformer meters, for energy accounting to accurately measure energy balance, and identify leakages for immediate corrective action. So far, 98 per cent of 1,200 feeder meters have been installed,” he said.

Ms Yeda said the company is actively managing costs revolving around financing, power purchase, capital expenditure and, transmission and distribution to improve its cash flow and boost its turnaround.

working capital

Kenya Power has struggled to cut its debt, reduce operating costs and restore its working capital into a positive position even as the expanded grid poses an oversight nightmare.

It plunged into a Sh939 million net loss in the year to June 2020, marking the first loss in 18 years.

The utility had made Sh2.89 billion loss in 2003.

Kenya Power added 500,397 new customers to the grid in the review period to hit 7.576 million customers but consumption has remained muted.

Gross electricity receivables — the value of electricity sales that Kenya Power had made but payment was pending — hit Sh23.55 billion at the end of June 2019 from Sh22.19 billion in the previous year.

Receipts from customers have been low due to reduced consumption and delayed payments for already consumed power, hurting its liquidity position amid falling earnings on high power purchase costs.