New power outage claims rules require further clarity

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New power outage claims rules require further clarity


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Kenya Power workers during live-line maintenance. FILE PHOTO | NMG

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Summary

  • The plan must be finetuned to ensure it is practical and efficient and achieves the bigger goal of ensuring we have a robust and reliable national electricity grid.
  • The draft regulations by the Energy and Petroleum Regulatory Authority (Epra) lay out the ground rules for making claims and when such compensation may not be made by Kenya Power.

The proposal to have Kenya Power compensate businesses for financial loss arising from unreasonable electricity outages is long overdue. It will put pressure on the utility to improve its services.

The plan, however, must be finetuned to ensure it is practical and efficient and achieves the bigger goal of ensuring we have a robust and reliable national electricity grid.

The draft regulations by the Energy and Petroleum Regulatory Authority (Epra) lay out the ground rules for making claims and when such compensation may not be made by Kenya Power.

A claim by affected businesses shall be lodged in writing with Kenya Power within 12 months after they suffer an outage. The outage must have been reported within 30 days of its occurrence.

The period of outage is not defined and needs to be incorporated in the proposed regulations before they are adopted.

One would expect that businesses should be able to make claims if they suffer an outage lasting at least an hour.

Shorter-term outages, which often present danger of equipment damages, are covered under Kenya Power’s existing policy of compensating households and businesses for losses arising from power surges. A cap on the compensation must be set and should incorporate elements of the size of the business making a claim. There also needs to be a way to verify the damages suffered.

Epra has made important exclusions in the compensation plan.

Customers who have illegal electricity connections, for instance, will not be eligible for compensation.

Kenya Power will also be shielded in cases where outages occur due to circumstances out of its control such as vandalism and when falling trees, cars or planes interfere with electricity supply.

A declaration of force majeure due to disasters like earthquakes will excuse the company from contractual agreements.

Kenya Power will also be cushioned from making compensations where it’s the fault of the affected persons.

Once all the rules are in place, the company should strive to process legitimate claims as soon as possible.

A backlog of claims will add another layer of disaffection with its customers.

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