Kenya Power writing off billions is a risky gamble

Kenya Power’s decision to write off Sh15 billion in unpaid bills does not bode well for the future of the utility firm and risks derailing efforts to cut the high cost of power.

One of the major factors that have been identified as causing high power charges are system losses, which must be compensated through customer bills.

Cutting these losses, partly by ensuring that those who use power pay for their consumption, has been identified as one of the short-term measures to tame high bills.

Therefore, the image of a power firm that has given up on recovering outstanding bills is not a good one, and is one that is hardly going to encourage other defaulters to pay up.

Some homes complain that the utility firm has not read the power use meters for years and the estimated bills are the order of the day.

It also does not sit well that a company that is writing off billions is at the same time eyeing bailout from the Exchequer, and guarantees from the Treasury to take on board more debt to finance capital expenditure.

This is why we hope that the write-off is just an accounting issue, and expect that Kenya Power will continue to make every effort to recover the owed dues, even if it means taking defaulters to court.

The company can and should also prevent further losses from the rogue users by disconnecting them. The drive to convert more customers to prepaid metering which cuts the risk of non-payment should also be ramped up.

It is encouraging though that the company is employing the services of debt collectors to chase the overdue payments.

At the end of the day, it is important to remember that the utility sells power generated largely through taxpayer-funded power stations, and is, therefore, a key cog in ensuring the taxpayer gets value for money.

Its survival and efficient performance is also important for the wider economy, given that expensive power has been making Kenyan goods uncompetitive compared to those from its African peers.

Simply put, Kenya Power is in no position to write off billions of shillings in unpaid bills at a time every coin counts in its effort to get back to good financial health.