Auditor reveals how Kenya Power inflates electricity bills

Kenya Power has been inflating electricity bills in what has seen consumers overcharged by up to 20 percent for the power they did not use, the Auditor-General has revealed.

In a shocking revelation before a parliamentary committee, Auditor-General Nancy Gathungu said a forensic review of generation, transmission and distribution of electricity found bills do not match actual consumption while extra charges loaded on the consumers by the utility are not traceable in the billing system.

Read: IMF renews push for Kenya Power board shake-up

“Almost 20 percent of the bill to consumers cannot be matched to actual consumption neither can the distribution company attribute it to a specific consumer,” Ms Gathungu said.

Neither Kenya Power nor the Energy and Petroleum Regulatory Authority (Epra) has sufficiently explained the anomaly.

The audit found that there was a miscalculation of system losses which is attributed to the use of outdated study reports, partial simulations and arithmetical errors.

Ms Gathungu, who was represented by her deputy Stanley Mwangi, told the National Assembly Committee on Energy probing the high cost of electricity in the country that, her office discovered cases of check meters lacking, faulty check meters and discrepancies between the check meters and the main meters leading to consumers being given bills that are not reflected in their meters.

According to the auditor, out of 96 generation plants supplying power to Kenya Power, only 38 had check meters. More shocking is that all 38 meters were off-the-grid power stations.

Ms Gathungu also told MPs that Kenya Power had no capacity to counter-check the invoices presented by the independent power producers (IPPs).

“There was a lack of primary access to the key indices which limited the ability of IPPs and KPLC to independently verify the authenticity of prices in the invoices where such indices were applied,” Ms Gathungu said.

“The risk from lack of access to these key indices means KPLC is limited in its oversight role of ensuring the submitted invoices were correct.”

The audit identified system losses by Kenya Power as adding the greatest cost burden to consumers.

Ms Gathungu pointed out that in the past three financial years, there has been a high percentage of system losses compared to that which is approved by both Epra and Kenya Power.

In the financial year 2019/2020, the approved efficiency loss was 19 percent but Kenya Power recorded 23.47 percent efficiency loss.

In 2020/2021, the approved system loss was 19 percent but the recorded loss was 23.98 percent. In 2021/2022, the system loss was 22.44 percent against the approved efficiency loss of 19 percent.

For each loss that surpasses the approved loss of 19 percent, the extra cost is passed to consumers in their power bills.

“Although the management indicates that they have been working to reduce the power losses, there is no evidence of efforts and achievements made along the improvement of these recoveries. Charging of losses impacts on the cost of electricity,” Ms Gathungu told MPs.

The committee chairman, Vincent Musyoka, said the startling revelations by the Auditor-General confirm fears Kenyans have been having about exaggerated power bills.

“The data by the Auditor-General are scary and capture the fears of this committee and Kenyans have been having all along,” Mr Musyoka said.

He pointed out that while there are intended losses in the transmission of power, they should be shared between Kenya Power and the power producer.

Kenya Power managing director Joseph Siror told MPs that losses were inevitable in the transmission of power from the point of generation to the consumer.

Read: Kenya Power pilots smart poles for internet

“The moment you move power from one point to another, there is definitely a loss of power. The longer the line, the higher the losses,” Dr Siror said.

He told MPs they are currently working with both KenGen and Ketraco on having shorter lines in order to reduce losses.

Dr Siror said the illegal connections were also contributing to the high losses to Kenya Power.

About 188,000 customers who have paid up for meters are not connected due to the unavailability of meters hence some resort to illegal connections, he said.

“We were impeded from procuring meters, but once we get authority to procure them, let them come to us. We will give them our certified contractors to connect them,” Dr Siror said, adding that they are doing everything both in the short term and long term to address concerns about the high cost of power.

→ [email protected]