For every Ksh.100 paid, Kenya Power only makes Ksh.2 profit - MD Joseph Siror

Kenya Power Managing Director and CEO Eng. Dr. Joseph Siror now says the company only makes 10 per cent in profits out of the amount it receives from consumers for electricity bills.

He said the power distributor is sometimes forced to incur little to no profits in its service to Kenyans.

Eng. Siror, who spoke on Citizen TV’s ‘The Big Conversation’ show on Thursday night, argued that since the company is mandated to supply electricity in the country, most installations are funded by the government thus the costs have to be recovered gradually from customers.

In the same light, he said some of the private customers who pay for connectivity, especially in the installation of transformers, are at times forced to incur higher costs since the services are commercial at first before the company later supplies the electricity cheaply in the neighbourhoods.

“Kenya Power operates as a commercial entity but there are those other programmes which the government does by virtue of the recognition of the importance of power and they normally come under the Last Mile scheme,” he explained.

“There is no provision for the cost that one would incur in putting the transformer; it would have come directly from Kenya Power resources.”

Eng. Siror went on to note that the aftermath of the process sees the company spending about 65 per cent of the customers’ bill to generate power and the expenditure trickles down to about 10 per cent in profits.

“For every Ksh.100 that you pay in the bill, 65% goes to generation. What only possibly comes to Kenya Power is Ksh.20. When you look at the composition of that Ksh.20, it might be 10% of that that is the profit that Kenya Power makes...it could even be lower,” he said.

“For every Ksh.100 we are dealing with, your profit is only Ksh.2 and if you were to make a capital investment in millions, it would take long for you to recover it and you might never even recover it.”

He defended the power distributor’s push to have more connections in the country saying it was the surest way to guarantee maximum profits.

“That is why the tariff was meant simple and the idea is to maximize the number of connections…so that the commercial person who wants power for commercial services should cater for that installation,” he said.

“Once it is installed, the rest who come on board only pay for installation and not for the transformer.”