Kenya Power will be barred from disconnecting customers over disputed bills in a push by the energy regulator to protect consumers caught up in rows with the utility firm.
Currently, Kenya Power unilaterally disconnects consumers over disputed bills, forcing them to pay a reconnection fee even after a resolution is reached. This comes amid increased cases of defaults with problematic bills being a key issue.
Kenya Power charges up to Sh13,000 for reconnection, underscoring the economic hit on consumers who are disconnected either due to outright defaults or bill disputes.
“Where a dispute on electricity bills between a licensee and a consumer has been referred to the Authority for determination, the Consumer shall remain connected until the dispute is determined,” reads the regulations.
The Energy (Electricity Reliability, Quality of Supply and Service) Regulations, 2024 have also set a maximum of 60 days for the hearing and resolution of the bill disputes that have been escalated to the Energy and Petroleum Regulatory Authority (Epra).
Customers who contest their bills are allowed to engage Kenya Power to amicably resolve the dispute. They are allowed to escalate unresolved disputes to Epra. The lowest reconnection fee is Sh580 for customers with disconnected meters. Customers who are delinked at the pole and service line pay Sh3,800 and Sh13,000 respectively for reconnection.
Businesses disconnected by Kenya Power are thrown into massive losses given that they miss power which is integral to manufacturing or service delivery. Others are forced to seek alternative power sources such as generators on disconnection, further increasing their operational costs.
For example, in March, a tribunal convened by Epra ruled that Kenya Power had unfairly slapped a customer with a bill of Sh417,972.
The customer is seeking compensation of Sh2.4 million that his business remained shut due to disconnected power, highlighting some of the pitfalls that Kenya Power faces over disputed bills.
Last year, the Auditor General revealed that Kenya Power has been inflating customer bills, overcharging customers by up to 20 percent. The Auditor General added that the investigations revealed cases of check meters lacking, faulty check meters and discrepancies between the main meters and check meters, leading to the inflated customer bills.
Kenya Power also estimates customer bills in some cases, in what has fuelled customer frustration over inflated bills. Some of the customers have dragged the utility firm to court and ended up winning most of the cases, forcing power distributor to compensate them. Kenya Power does not make public data on the amount of money that it is yet to collect from consumers due to disputed bills.
However, defaulted bills grew by Sh16 billion in a year to hit Sh35 billion in the financial year ended June 2023. The defaults have hurt the firm’s efforts to grow profits and ease reliance on the Treasury. Kenya Power posted a net profit of Sh319 million in the half year ended December 2023, an improvement from a net loss of Sh1.14 billion posted in a similar period in 2022.
Kenya Power has over the years turned to disconnecting customers over disputed bills in a bid to push them to pay. Disconnection over disputed bills add to the customer frustrations of blackouts and at times low quality supply.
Kenya Power’s struggles over the surging customer defaults have since pushed the firm to seek debt collectors or the intervention of the National Treasury to recover billions of shillings. The utility firm added 253,480 customers between July and December, pushing its customer base to 9.2 million at the close of the year.
