Kenya Power and Lighting company’s (KPLC) revenue from the reconnection of defaulting customers to the national power grid reached a record KES 779.66 million in the fiscal year ending June 2022, as the company intensified its war on this class of customers to boost its annual revenues.
The revenue is a 41% increase from KES 552.51 million earned in the fiscal year ending June 2021 and from KES 252.3 million made the previous year, indicating continued annual growth in reconnection earnings.
The utility charges KES 580 to reconnect customers whose meters were disconnected, KES 3,828 to reconnect customers whose connections were disconnected at the pole, and KES 13,000 to reconnect customers whose connections were disconnected at the service line.
Kenya Power has increasingly relied on mass campaigns to disconnect meters from customers who fail to pay their electricity bills, with reconnection fees intended to deter would-be defaulters.
The utility has also been forced to use debt collectors to recover some of these debts and disconnect defaulting customers from the grid.
Kenya Power also intends to increase the proportion of its customers connected to prepaid meters to reduce defaults when postpaid customers still account for the majority of its revenue.
Last year, the utility returned to the market to purchase approximately 5,000 new smart meters to replace its old ones, which are prone to tampering, one of the significant revenue leakage areas.
Unlike traditional accumulation meters, which record the total amount of electricity used, smart meters record the time of electricity use in hourly or shorter intervals.
“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, with KES 27.3 billion owed in the fiscal year ending June 2022.
Much of this debt had not been paid for more than three months as the fiscal year ended, giving the utility company little hope of recovering much of the money from customers.
KES 14.3 billion of the debt had been outstanding for over three months, KES 2.11 billion for 30 days to 90 days, and KES 10.7 billion for less than 30 days.
Kenya Power wrote off KES 14.9 billion of the total outstanding debt, which means that while it would be beneficial to the company’s finances if customers paid it, the company does not expect to recover that debt.
Domestic customers owed 60% of the outstanding debt, 30% to small and medium-sized enterprises (SMEs), and 10% to large customers.
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