Kenya Power managing director Ben Chumo speaks to journalists at Stima Plaza in Nairobi after his appointment early this year. FILE
What you need to know:
Kenya Power needs Sh2.7bn to link 27,561 applicants to the national grid.
The firm has been issuing quotations above the traditional Sh35,000 and Sh49,000 for single phase and three phase respectively after exhausting the cash.
State power distributor Kenya Power has piled up 27,561 applications for connection as it strains under low budgetary allocation.
The Ministry of Energy is now pushing Parliament to have further subsidy for quarter one 2014 included in the second supplementary budget.
Kenya Power needs an additional Sh2.7 billion. Parliament heard the power transmission firm has been issuing quotations above the traditional Sh35,000 and Sh49,000 for single phase and three phase respectively after exhausting the cash.
Energy Cabinet secretary Davis Chirchir said the Treasury only allocated the listed firm the Sh2.7 billion under the supplementary budget that was tabled in Parliament last evening to cater for October, November and December 2013 connection subsidy.
Kenya Power managing director Ben Chumo said the government did not provided a further Sh2.7 billion for January, February and March this year.
He said that the cash received was utilised between September and December for the purpose of facilitating connectivity of customers falling under the maximisation schemes quoted at Sh34,980 and Sh49,080 for single phase and three phase respectively.
Mr Chirchir said the ministry has initiated discussions with the World Bank, French financier AFD and the African Development Fund (AfDB) for long term concessionary funding for Kenya Power to support electricity access programme.
“Towards this end, AfDB is considering an application for a loan in the sum of $160 million (Sh13.7 billion). If this comes through, customers will be able to access loans for power connections at a monthly repayment rate of Sh500 over a six year period,” said Mr Chirchir.
A study to independently determine the cost of effecting new connections commenced this month and is expected to be completed in three months.
Mr Chirchir, Mr Chumo and Energy PS Joseph Njoroge were hard-pressed to explain why the Kenya Power was issuing quotations to customers which range between Sh59,000 and Sh350,000 for three phase connections.
“I have two quotations from a customer who was first billed Sh59,000 and two weeks later given another quotation of Sh350,000 for a three-phase connection,” said Chuka-Igambang’ombe MP Njuki Muthomi who had accused Kenya Power of levying illegal charges on customers yet the government had been reimbursing it through the subsidy.
The government directed Kenya Power to connect customers under the maximisation scheme that was established in 2004.
“We have maintained our connection rates for the last 10 years and we have not levied any extra charges on government,” Mr Chumo responded and promised to look at the quotations that were tabled by Mr Njuki.
The ministry said it is seeking an upward review of the Kenya Power charges on electricity connection because the costs of material, labour and transport have substantially escalated.
“Prices of key items over the last four years have risen. Diesel has gone up by 47 per cent, poles by 45 per cent, copper and aluminum cables by 22 per cent and transformers by 100 per cent.
“The overall impact of the price escalation over the last eight years is an average increase in customer connectivity cost to Sh75,580 for single phase and Sh89,680 for a three phase connection for constructing a service line within 600-metre radius from an existing transformer,” Mr Chumo told MPs.
The committee, chaired by Kigumo MP Jamleck Kamau directed Kenya Power to maintain the current maximisation scheme even as it seeks a further budget subsidy.
As a result of the subsidy, new annual connections increased annually from 48,949 in 2004/05 to 307,101 in 2012/13, bringing the total number of electricity customers from 735,000 to 2.5 million. This represents an increase of 336 per cent over the same period.
Mr Chumo said electricity access stands at 35 per cent up from 12 per cent in 2004.
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