Kenya Power retreat from tariffs rise a welcome relief

The change in focus for Kenya Power from perpetually seeking higher power tariffs to cover for revenue shortfalls to addressing the underlying problem of system losses and punitive capacity charges is a welcome move towards competitiveness and fair electricity prices.

Given the state of the economy, and the already strained household budgets, a tariff raise would not have gone down with the public.

It would have hurt the already uncompetitive local manufacturing sector that has struggled to beat off cheaper imports.

Kenya-made goods are unable to compete in the export market because of higher power costs compared to other African economies.

It is refreshing that the reality has finally dawned on the power distributor.

Under current conditions, however, the company will continue to make losses given the significant power it is losing to theft and poor transmission infrastructure, as well as the high cost of acquiring this capacity especially from private generators.

The government must therefore ensure that it backs the company by reviewing the power purchase agreements that are clearly skewed in favour of the producers.

On its part, Kenya Power should carry through its promise of cracking down on illegal connections that have helped raise power losses to 23.9 percent of purchased capacity, well above the 14.9 percent the firm can recover through customer bills.

These unbilled connections are not only a drain on the company — which lost Sh16 billion in unrecoverable power losses in the year ended June 2020 — but also on those who are legally connected, since it is they who eventually have to cover the cost of the stolen power.

This is why the deal with Safaricom for the installation of smart meters that will track usage, outages and a system that tracks meters remotely must be given priority.

At the end of the day, all that Kenyans are asking for is affordable power that will cut their high energy bills and make their enterprises more competitive.

It is a good thing that Kenya Power has finally realised this simple fact.