Editorials

Kenya Power needs a way out of idle electricity trap

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A Kenya Power worker inspects a transmission line in Nairobi. FILE PHOTO | NMG

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Summary

  • The utility firm is now grappling with the issue of excess power as electricity generation hit one billion kilowatt-hours in October.
  • According to the Energy and Petroleum Regulatory Authority, the excess power in the system was 227 million kilowatt-hours in the 12 months to August 2020.
  • This is not good news for consumers — individuals and institutions.
  • The situation has kept electricity costs high, given that Kenya Power must pay the electricity producers for idle power.

Kenya Power #ticker:KPLC has hardly digested the record loss for the first time in 17 years following the Treasury’s disclosure last week that the electricity distributor recorded a net loss of Sh2.98 billion in the financial year ended June 2020.

The utility firm is now grappling with the issue of excess power as electricity generation hit one billion kilowatt-hours in October.

According to the Energy and Petroleum Regulatory Authority, the excess power in the system was 227 million kilowatt-hours in the 12 months to August 2020.

This is not good news for consumers — individuals and institutions. The situation has kept electricity costs high, given that Kenya Power must pay the electricity producers for idle power.

It’s time that the power monopoly put its house to boost efficient consumption of electricity so that the amount purchased marches the demand. The consumers will benefit from lower power bills. Besides, it would also ease the prices of goods due to lower production costs.

Kenya Power is also pushing for an increase in tariffs. This is likely to further depress demand, which is already reeling from the impact of Covid-19 as domestic and industrial consumers reduce the usage of power to cut costs.

Even though the power generators deserve payment for the electricity produced, whether or not there is a market for it, Kenya Power needs to ensure that what is produced meets the existing demand.

The other strategy would be to create a high demand for power, especially among industrial consumers, by keeping the off-peak rates low. This would encourage manufacturers to take advantage of the incentive, ensuring that the amount of idle power is reduced.

The Treasury should also consider investing more in renewable power sources — hydro and geothermal — to ease the dependence on diesel-powered generators, which are not only costly to purchase but also pollute the environment.

A sober approach in the management of power resources is long overdue. Kenya Power should aim for a win-win way out of its financial dire straits by sealing revenue leakages due to systemic inefficiencies.