Ex-CS Keter says high operating costs, illegal connections behind Kenya Power losses

Former Devolution Cabinet Secretary (CS) Charles Keter on Tuesday spoke about the dwindling fortunes of national energy supplier Kenya Power recorded in recent years.

Keter on Tuesday last week became the first CS to resign from his position to pursue a career in politics.

He intends to contest for Kericho’s governorship under a UDA ticket at the August General Elections in a bid to replace current Governor Paul Chepkwony who is serving his final term in office.

The former CS joined President Uhuru Kenyatta’s cabinet in 2015 after resigning as Kericho Senator. He served as the Energy and Petroleum CS until 2021 when he was moved to the Devolution docket.

According to Keter, high operating costs, vandalism and illegal connections are the main reasons behind Kenya Power’s dwindling fortunes in the country.

“The revenue of power utilities across the world is not great. They are not doing well because the cost of materials is expensive compared to the revenue base so that really affected the performance of Kenya Power,” Keter said on Citizen TV’s NewsNight show.

“Vandalism and illegal connections also resulted to system losses. The system losses of KPLC is about 23 per cent what is provided for under the EPRA law is about 19.9 per cent so therefore before you even sell a kilowatt you are losing about Ksh.5.”

When he made his resignation on Tuesday, Keter cited that during his tenure as Energy CS, electricity access in the country increased by 75 per cent.

He however told NewsNight show host Waihiga Mwaura that the increment did not reflect on Kenya Power’s revenues.

“If you see the connectivity when the Jubilee administration came in, it was about 2.3 million households and as at December 2021, it was about 8.3 million households so in terms of percentage it is around 70 per cent rising from about 29 per cent,” Keter added.  

“That is the number of individual customers connected and these are low level, these are the last mile connectivity households which are paying about Ksh.15,000 for connectivity so when you look at their base it is about 2 billion. It is however not much revenue for Kenya Power.”

He continued on to say that Kenya Power never used any of its capital during the expansion process as the money was raised from international bodies such as the World Bank and the African Development Bank.

Kenya Power recorded a Ksh.1.5 billion profit in net earnings for the year ended June 30 compared to a Ksh.939 million loss in 2020.

Profit before tax stood at Ksh.8.2 billion in the period translating to a 216 per cent year on year growth compared to a loss before tax of Ksh. 7.04 billion a year earlier.

Keter likewise dismissed a report by a global energy rating company which ranked Kenya as the fourth highest African nation, in terms of cost of power on the continent, citing that the country’s energy tariff was cost reflective and unsubsidised unlike other nations.

He similarly chimed in on allegations that his appointment to the Devolution docket was a demotion of sorts especially since he served as Energy CS for close to six years.

“All ministries are the same. For me it was a promotion because I learned a lot of things having stayed in Energy since I was an assistant minister. I wish I stayed there (Devolution) for a longer period because I would have learned a lot of things,” he added.