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KPLC Partly Takes the Blame for the Electricity Price Escalation

BY Soko Directory Team · April 27, 2018 01:04 pm

The Kenya Power and Lighting Company (KPLC) has identified meter reading estimations, inaccessible premises, unclear billing process and the fuel cost charges as the reasons behind the escalation of electricity prices, an issue that has raised concerns among customers across the country.

For the past several months, the company has been in the limelight with the issue coupled with delayed token generation and the recent disruption of purchases for a system upgrade.

According to Dr Ken Tarus, the Managing Director and the Chief Executive of KPLC, the system upgrade was an initiative undertaken by the company to enhance service delivery to the customers by easing the payment for electricity, but the issue of price escalation is because the company has been basing costs on estimations.

“There are several factors that explain why there has been an increase. On our part, the increase in power prices is attributed to meter reading estimations. The company sometimes cannot read all the meters across the country and inaccessible premises and meter placement have been the leading cause,” he said.

Speaking during a press briefing, Dr Tarus noted that the hike in the bills customers get could also be as a result of previous bill estimations, unsettled bills, and the standing charges.

The statement, however, doesn’t answer the frustrations some customers have been having regarding the standing charges. Some of them have taken to the social media to emphasize on how KPLC is ‘stealing from them.’

Previously, with 200 shillings, a customer could get 25 units or more but now, with the same amount the number of tokens prepaid customers get is hardly worth noting. This is one issue that has angered Kenyans across the country.

In its defence, the company made a clarification on the billing process saying that both the postpaid and the prepaid customer tariffs attract the same standing charges of 174 shillings a month. What this means is that the number of units a customer gets depend on the amount used and whether the previous or current standing charges have been settled.

“Any amount used to buy units at the end of the month will have the standing charges first deducted before the tokens are generated. This means if the amount is less than 174 shillings, a customer will not get units and will require them to add more,” the MD said.

Backing the company’s justification was the Energy Cabinet Secretary Charles Keter who assured Kenyans that the government intends to standardize bill generation.

“The Energy Regulatory Commission (ERC) is working on a tariff regime that will be gazetted in the next 3 months. The commission will look into the standing charges, its importance, whether it will be scraped off or harmonized in the process. This, of course, will depend on other factors like taxes, the Fuel Cost Charges (FCC), and any other repercussion that will come after,” said the CS.

He also said that the cost of power in Kenya hasn’t changed and that the fluctuation of costs is also attributed to the instability of the fuel cost charges. He said that the government is doing its best to complete power generation plants in Turkana and Garissa among others to increase the supply and lower electricity costs.

The expectations on the tariff harmonization and the exact value of the standing charges hence isn’t clear. But by agreeing to revise the standing charges issue, this could be interpreted as an admittance by the government that electricity costs are outrageous.

KPLC also made a clarification on the number of tokens different customers get. Last mile platform customers receive fewer tokens compared to those who are not.

“The cost of electricity connection 15,000 shillings, an amount which is recovered slowly as you purchase tokens. For instance, if you buy tokens with 1,000 shillings, half the amount will be recovered as part of the loan and the remaining, 500 shillings will be used to generate tokens. We are working on ensuring that your bill clearly indicates the amount deducted,” said Dr Tarus.

In an endeavour to better its services, KPLC also launched a mobile avenue for postpaid customers to self-read their meters and remit the data online for generation of bills the platform. The app is available for both Android and iOS smartphones.

Soko Directory is a Financial and Markets digital portal that tracks brands, listed firms on the NSE, SMEs and trend setters in the markets eco-system. Find us on Facebook: facebook.com/SokoDirectory and on Twitter: twitter.com/SokoDirectory

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