On the fixed electricity charge & the missing Sh5bn
By MUNGAI KIHANYA
The Sunday Nation
Nairobi,
01 April 2018
After reading
through the 2016/17 audited financial report of Kenya Power & Lighting
Company Ltd, I am convinced that there is no basis for claiming that our
electricity bills are inflated. This is what the Mr. Edward Ouko, the
Auditor General wrote: “I checked whether the tariffs are appropriately
set up in the relevant systems, that consumption is correctly capture
and that the system computations are accurate”. After all those checks,
he did not detect any errors in those systems.
Nevertheless, the
question that needs an answer is why the power bill doubles when the
levies, adjustments and taxes are added.
There are simply too many statutory (busy-) bodies taking money from
power consumers yet there is no tangible benefit accruing from them.
To be fair to these (busy-) bodies, however, anyone interested in
knowing what they are doing with all this money can simply visit their
respective offices and demand to see the audited annual reports.
Still, there is one amount in the bill that Kenya Power must explain.
This is the so-called “Fixed Charge”. The Sh150 must be paid whether or
not the customer consumed any electricity.
I have seen a few people asking about it but the answers have not been
forthcoming. Long ago, I used to think that this money was meant to meet
the cost of reading the meter.
Whether you have consumed power or not, the meter reader has to visit
your house to take the reading. I was satisfied with that, even though
the amount appeared to be too high.
Then the power company introduced the pre-paid meters. These do not
require to be read. However, the fixed charge is still collected from
them as well. Thus, my earlier reasoning no longer holds water!
Luckily, I came across the financial statement of the Kenya Electricity
Generating Company (KenGen), and I think I
found the answer. According to this report, the company’s revenue in the
2016/17 period was Sh29.4bn. This came from two main sources: “Capacity
Charges” (Sh21.7bn) and “Energy Charges” (Sh7.3bn).
The capacity charge is the amount paid to KenGen for connecting their
generators to the power lines – whether Kenya Power is drawing
electricity or not. It’s like when you hire a car: you pay for it
whether you drive it or not, don’t you? The capacity charge is about 75
per cent of KenGen’s revenue!
I suspect that this is the reason consumers are also charged a fixed
amount – whether you switch on your power or not. As we wait for Kenya
Power to verify if this is so, let me highlight an inconsistency that I
noticed.
Kenya Power’s audited report, says that it paid KenGen Sh33.99bn for
“basic power purchase cost” in the year ending on 30th June
2017. However, KenGen says that it receved only Sh29.0bn from Kenya
Power during the same period. The question then is: where did the extra
Sh4.99bn go?
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