21 September 2012 – Since April 2009, state owned electricity distributor Kenya Power has been installing prepaid meters with the aim of improving service delivery, cutting operational costs and reducing commercial losses associated with customer defaults.
Under the new system, instead of making payments after receiving monthly bills, customers pay for power upfront.The company plans to spend almost US$60 million in the next 10 months to procure and install prepaid meters for an additional 520,000 customers.
According to CEO of Kenya Power Joseph Njoroge, the funds will be both internally generated as well as borrowed from multilateral lenders such as the World Bank. Kenya Power suffered a setback in 2011 when its proposal to review the base tariff that would have seen electricity bills go up drastically was rejected by the Energy Regulatory Commission (ERC) on grounds that consumers needed to be shielded from high costs of living.
Had the ERC gone with a base tariff which, according to the law, can be reviewed every three years, Kenya Power would have been given the revenue to generate funds to finance its expansion plans. The rates were last reviewed in June 2008, guided by the need to finance power generation projects that were lined up for development at the time, including geothermal plants in Olkaria and the Kipevu thermal power plant.
Speaking at the launch of the roll out of the second phase of the prepaid meter system that will go countrywide, Njoroge tried to allay fears that 1,500 meter readers could find themselves redundant as a result.“We have other jobs that these employees can do. They will be redeployed to carry out meter inspection and reconnections.”
Kenya Power employs 8,543 staff, up from 7,279 in 2011. However, Kenya’s Daily Nation reports that with a planned cut in operating costs among big expectations of the new system it might be tricky for Kenya Power to maintain the current wage bill and probably more that may come about as a result of the on-going upgrade of the terms of employment for meter readers.