Electricity distributor, Kenya Power’s debt to its various power suppliers has hit a whopping KSh47.85 billion for the period up to June 2020. This includes KSh23.7 billion owed to KenGen, KSh19.48 billion owed to independent power producers, and another KSh4.67 billion to Kenya Electricity Transmission Company (KETRACO).
In 2018, KenGen penalised Kenya Power KSh1 billion 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 KSh13.71 billion for more than 60 days while a further KSh694.63 million had remained unpaid for over a year.
In July this year, the electricity distributor announced plans to increase electricity prices by up to 20% and is already in talks with the Energy and Petroleum Regulatory Authority (EPRA) regarding the same.
If the application is approved, Kenya Power will increase charges for consumers using less than 100kWh per month to KSh12.5 per unit up from KSh10. The company will also increase costs for customers who use more than 100 units per month to KSh19.53 per unit up from the current KSh15.80
The Energy ministry argues that Kenya Power needs more cash to cover the cost of buying wholesale electricity from generators such as KenGen and maintenance of the national grid, hence the proposed hikes.
The cost of buying electricity from power generators such as KenGen jumped by KSh18 billion last year, blunting the impact of an increase in sales.