Kenya Power to pull plug on customers with pending bills

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Kenya Power to pull plug on customers with pending bills


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Kenya Power workers repair a power supply line. FILE PHOTO | NMG

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Summary

  • The State monopoly Wednesday send a notice to post-paid customers to immediately settle any outstanding electricity bills to avoid their accounts being disconnected.
  • Gross electricity receivables — the value of electricity sales that Kenya Power had made but payment was pending— hit Sh23.55 billion at the end of June 2019 from Sh22.19 billion in the previous year.

Kenya Power #ticker:KPLC customers with unpaid electricity bills risk blackouts as the struggling utility firm moves to recover billions of shillings to improve its cash position.

The State monopoly Wednesday send a notice to post-paid customers to immediately settle any outstanding electricity bills to avoid their accounts being disconnected.

Gross electricity receivables — the value of electricity sales that Kenya Power had made but payment was pending— hit Sh23.55 billion at the end of June 2019 from Sh22.19 billion in the previous year.

“Customers who will not have paid their outstanding bills by the date when the bill is due will have their supply of electricity disconnected immediately,” said the firm in a notice.

“The customer will thereafter be required to pay the requisite re-connection fees for their accounts to be reinstated.”

The firm warned that customers who will reconnect themselves risk a minimum fine of Sh1 million and a jail term of at least one year.

Kenya Power had last year projected a rise in credit loss allowances — an estimate of the debt that it is unlikely to recover from customers — on increased difficulty by the customers to make the payments following Covid-19 economic fallout.

Receipts from customers have been low due to reduced consumption and delayed payments for already consumed power, hurting its liquidity position amid falling earnings on high power purchase costs.

Kenya Power plunged into a Sh939 million net loss in the year to June 2020, marking the first loss in 18 years. The utility firm had made Sh2.89 billion loss in 2003.

The firm added 500,397 new customers to the grid in the review period to hit 7.576 million customers but consumption has remained muted.

The state monopoly’s short-term liabilities had outstripped short-term assets by Sh74.5 billion, putting it in a difficult position to honour obligations such as 40-day window for paying electricity suppliers.

KenGen for instance hit Kenya Power with a Sh722.31 million financial penalty in the year ended June 2019 for delayed payments.

Kenya Power’s liquidity position has come under increased pressure given that obligations have remained constant mostly due to the nature of power purchasing contracts.

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