Kenya Power #ticker:KPLC has written off Sh15 billion in bad debts from unpaid electricity bills, most of which have been outstanding for more than three months.
This has seen the utility company impair Sh15 billion of the Sh29.6 billion unpaid electricity bills as at June 2021, according to the company annual report.
Kenya Power says it is only confident of collecting half of its pending power bills that are uncollected by upto three months.
But it has lost hope of recovering Sh14.5 billion that is overdue for more than three months, forcing it to make provisions for Sh13.7 billion of the outstanding power bills, fearing they may not be collected.
“It means Kenya Power is provisioning, which is an accounting charge on the balance sheet, if they collect it will be written back, if not there will be a separate accounting for writing off,” said Nikhil Hira.
Kenya Power has been losing billions of shillings in uncollected revenues since the company dispenses electricity before collecting.
Households or domestic power users top the list of defaulters with about 60 percent of the outstanding bills among domestic customers, 20 percent SMEs and 10 percent commercial.
This marks a shift given that large power users – mostly manufacturers – have been top in the defaulters list in the past.