By Getrude Matayo,
Electricity distributor, Kenya Power debts to its key supplier, the Electricity Generating Company (KenGen) hit 23.7 billion shillings, pointing to growing debt distress to the monopoly energy distributor.
In 2018, KenGen penalized Kenya power 1 billion shillings as interest on late payment after the expiry of the 60-day window beyond which the debt begins earning interest. By then, Kenya Power had owed KenGen 13.71 billion shillings for more than 60 days.
The debts covering the period to June 2020 excludes another 19.48 billion owed to independent Power producers supplying it with electricity and 4.67 billion owed to the Electricity Transmission Company.
In July this year, the electricity distributor announced plans to increase electricity prices by up to 20 percent and is already in talks with the Energy and Petroleum Regulatory Authority (EPRA).
According to the disclosures contained in a confidential document shared with the company’s board of directors and to management, the energy regulator and the parent ministry also show that different government departments owe the electricity distributor close to 5 billion in pending payments for electricity supplied.
The documents also detail the firm’s push for a state procured deal that will save it from penalties associated with debt it owes the two-state corporations and fresh negotiation of electricity supply deals with power generators.
If the July application is approved, Kenya’s power will increase charges for consumers using less than 100kWh per month to 12.5 shillings per unit up from 10 shillings. The company will also increase costs for customers who use more than 100 units per month to 19.53 shillings per unit up from the current 15.80 shillings.
State corporations should agree on payment plans on how they will settle the outstanding debts owed to each other as at 30th June 2020 and waive penalties on late payments according to the document detailing the state of affairs at Kenya Power.