Competition watchdog probes Kenya Power Sh8bn backdated bills

CAK director-general Wang’ombe Kariuki. FILE photo | nmg
CAK director-general Wang’ombe Kariuki. FILE photo | nmg 

The competition watchdog has started investigating Kenya Power #ticker:KPLC for overcharging electricity consumers and failing to disclose to homes and businesses backdated bills worth Sh8.1 billion that the utility started recovering from November.

The Competition Authority of Kenya (CAK) has asked aggrieved customers through the complainant, Apollo & Co Advocates, to forward their inflated monthly bills for investigation.

Kenya Power’s annual report showed the utility was backdating bills worth Sh8.1 billion to recover costs incurred on diesel generators last year which were not factored in monthly charges between February and March.

This had the impact of inflating power bills, with the fuel cost charge — which is tied to the amount of diesel-generated electricity on the grid — hitting a three-year high in December.

“In accordance with sections 31 and 70A of the Competition Act, you are requested to facilitate investigations by providing copies of your clients’ electricity bills for the months of March 2017 to date,” the CAK says in a letter to Apollo & Co Advocates, which last week called for the probe on behalf of homes and businesses.

Apollo & Co Advocates said Kenya Power was abusing its monopoly and market dominance in misleading consumers on pricing and was in breach of consumer laws by failing to make disclosure on the backdated bills.

Kenya Power revealed the hefty bill in its annual report, explaining that costly power due to increased uptake of expensive diesel-generated electricity was not fully billed to homes and businesses between last February and August.

This action was taken to keep a lid on rising power prices in an election year. The bill is part of the Sh10.1 billion identified as unrecovered power fuel costs in Kenya Power’s annual statement for the year ended June 2017.

About Sh2 billion has been recovered so far, leaving out Sh8.1 billion that will be passed on to consumers in monthly invoices.

Energy secretary Charles Keter disowned the disclosure in the report, linking the costly electricity to over-estimation of consumption and increased injection of expensive thermal power to the grid following repairs of plants.