An estimated 680,000 Kenyan homes might have been illegally connected to the national grid in 2019, leading to massive system losses that cost Kenya Power billions, analysis of official data shows.
A new report from the Kenya National Bureau of Statistics (KNBS) reveals a variance of 678,684 between the number of people who said they are connected during the 2019 census and the official figures given by power distributor Kenya Power on domestic connections the same year.
KNBS data shows that 6,069,680 households, or 50.4 per cent, were connected to the mains electricity, a higher figure than the 5,390,396 that the State-owned firm gave the same year.
Illegal power connections are one of the causes of system losses that the power distributor recovers by passing on the cost to consumers, pushing up the cost of power.
“These losses contribute to high power charges to the consumers since the industry regulator allows the company to charge up to 19.9 per cent of the power losses to consumers,” Auditor-General Nancy Gathungu said about Kenya Power’s accounts.
The utility firm loses about 20 per cent in revenues from fraud and illegal connections.
In the year ended June 2021, consumers paid Sh20.1 billion to the utility firm for electricity theft and leakages from an ageing transmission network.
Kenya Power says high system losses are due to technical and commercial factors arising from the expanded transmission and distribution network as well as increased electricity pilferages.
The Energy and Petroleum Regulatory Authority (Epra) in July 2020 allowed Kenya Power to recover system losses equivalent to 19.9 per cent of the units it buys from generators, up from 14.9 per cent.
This saw consumers pay an extra Sh5.06 billion, pushing their total cost burden for electricity theft and leakages to Sh20.1 billion based on system losses of 24.14 per cent for the year to June.
Kenya Power bought 12,131 gigawatt-hours (GWh) in the review period but only sold 9,203 GWh or 75.86 per cent of the units.
This means that 2,928GWh or 24.14 per cent of the units were lost.
The company, however, billed consumers for 2,414 GWh out of the lost units, resulting in a charge of Sh20.1 billion under the 19.9 per cent system loss recovery margin.
System losses are the difference between the total amount of energy procured and sold. It has technical and commercial losses.
Technical losses occur when electrical energy is dissipated in the process of transmission and distribution while the commercial type is mainly attributed to pilferages, faulty meters and meter tampering.