Why consumers continue to pay high electricity bills
Kenya Power incurs the second highest power losses of any utility in Africa, leading to higher electricity bills for consumers, a new report shows.
The electric utility losses 22 per cent of all the power it buys which is 12 per cent more than the average losses in other developing countries.
Ethiopia wastes the highest amount of power through system losses followed by Kenya and Ghana, International Energy Agency (IEA) says in the just released Africa Energy Outlook 2019 report. African utilities on average lose 16 per cent of the power produced.
“Higher losses are a combination of a number of factors including poor operational performance on the part of utilities and theft of electricity from utilities,” IEA says.
According to Kenya Power’s half-year financial report, system losses stood at 22.8 per cent over the half-year to December 2018, which was higher than 20.3 per cent recorded over a similar period in 2017.
It has blamed increased coverage of last mile connectivity project for the higher system losses.
The losses are the difference between what the firm buys from producers and what it sells to consumers.They are incurred due to various factors, major ones being old transmission infrastructure and consumer theft through meter tampering.
System inefficiencies lead to high cost of operations which are then passed on to consumers inform of increased cost of power.
The Energy and Petroleum Regulatory Authority (EPRA), formerly Energy Regulatory Commission, reduced the amount that Kenya Power can recover from its customers to 14.9 per cent of system losses, down from 15.9 per cent. This means that the firm will be forced to absorb the extra system losses.
Kenya Power is currently seeking approval from the energy regulator to increase the cost of power, according to media reports. The system losses appear to be getting worse by the year.
In the financial year to June 2018, the company said the losses increased to 20.5 per cent from 18.9 per cent in 2017. South Africa, Angola and Mozambique have the lowest system losses at 10 per cent, 12 per cent and 14 per cent respectively.
Kenya Power General Manager for Business Strategy Thagichu Kiiru, said the utility has deployed a software system to identify and segregate system losses. This, he added, will help them tackle the problem faster.
The digital system dubbed the Energy Balance Module, is a software that detects areas with high energy losses within the power supply network.