Kenya Power’s revenue from re-connection of defaulting customers back to the national power grid hit a record Sh779.66 million in the financial year to June 2022 as the company stepped up war on this class of customers to boost its annual revenues.
The revenue is a 41 per cent increase from Sh552.51 million it earned from the same in the year to June 2021, and from Sh252.3 million in the previous year marking continued annual growth in reconnection earnings.
The utility charges Sh580 to reconnect customers whose meters were disconnected, Sh3,828 for those who were disconnected at the pole and Sh13,000 whose connection was disconnected at the service line.
Kenya Power has increasingly turned to mass campaigns to disconnect meters of customers who default on paying their electricity bills with the reconnection charges aimed to serve as deterrent for would-be defaulters.
The utility has also been forced to resort to debt collectors to try and recover some of these debts and disconnecting the defaulting customers from the grid.
Kenya Power is also aiming to grow the share of its customers who are connected to prepaid meters to reduce the defaults at a time most of its revenue is still derived from postpaid customers.
The utility last year went back to the market to procure some 5,000 new smart meters to replace its old meters that are prone to tampering which is one of the major revenue leakage areas.
Smart meters record the time of electricity use in hourly or shorter intervals unlike traditional accumulation meters, which simply record the total amount of electricity used.
“The Company scaled up the implementation of the Smart Meters targeting SMEs. The smart meters enabled us to remotely disconnect overdue accounts and promptly reconnect customers upon payment of their bills, thereby improving on the turnaround time,” said the utility.
Kenyans owe Kenya Power billions of shillings in unpaid power bills, and in the year to June 2022, this figure stood at Sh27.3 billion.
Much of this debt had not been paid for more than three months heading to the close of that financial year leaving the utility company with little hope of recovering much of the money from the customers.
Some Sh14.3 billion of the debt was outstanding for more than three months, Sh2.11 billion was outstanding for between 30 days to 90 days and Sh10.7 billion was due for less than 30 days.
Kenya Power wrote off Sh14.9 billion of the total outstanding debt which means that while it would be a boost to its finances in case the customers paid it, the company does not expect to manage to recover that debt.
Of the outstanding debt, 60 per cent was owed by domestic customers, 30 per cent by small and medium-sized enterprises (SMEs) and 10 per cent by large customers.
