Auditor General Reveals How Kenya Power Inflates Electricity Bills

A startling revelation by the Auditor-General has shed light on alleged malpractice by Kenya Power, where consumers have been reportedly overcharged by as much as 20% for electricity they did not use. The ongoing controversy has raised concerns about billing accuracy, extra charges, and transparency within the utility.

The Auditor-General, Nancy Gathungu, disclosed that a forensic review of electricity generation, transmission, and distribution had uncovered significant discrepancies between billed amounts and actual consumption. The audit indicated that a substantial portion of the bill, nearly 20%, could not be matched to specific consumers or actual energy usage.

“Almost 20 percent of the bill to consumers cannot be matched to actual consumption neither can the distribution company attribute it to a specific consumer,” Ms Gathungu said.

Despite these findings, both Kenya Power and the Energy and Petroleum Regulatory Authority (Epra) are yet to provide satisfactory explanations for the irregularities.

Gathungu further highlighted issues related to outdated study reports, partial simulations, and errors in calculating system losses, contributing to the billing anomalies.

An alarming aspect of the audit was the revelation that out of 96 power generation plants supplying Kenya Power, only 38 were equipped with check meters. Moreover, these meters were solely associated with off-the-grid power stations, raising concerns about oversight and accuracy in billing for these stations.

The audit also highlighted challenges in verifying invoices submitted by independent power producers (IPPs). Gathungu noted a lack of access to key indices required for cross-verification, limiting Kenya Power’s ability to independently authenticate prices and verify billing accuracy.

“There was a lack of primary access to the key indices which limited the ability of IPPs and KPLC to independently verify the authenticity of prices in the invoices where such indices were applied,” Ms Gathungu said.

“The risk from lack of access to these key indices means KPLC is limited in its oversight role of ensuring the submitted invoices were correct.”

A significant factor driving the cost of burden for consumers was identified as system losses. These losses exceeded approved levels for several financial years, ultimately leading to increased costs for consumers in their electricity bills.

In the financial year 2019/2020, the approved efficiency loss was 19 percent but Kenya Power recorded 23.47 percent efficiency loss.

In 2020/2021, the approved system loss was 19 percent but the recorded loss was 23.98 percent. In 2021/2022, the system loss was 22.44 percent against the approved efficiency loss of 19 percent.

For each loss that surpasses the approved loss of 19 percent, the extra cost is passed to consumers in their power bills.

“Although the management indicates that they have been working to reduce the power losses, there is no evidence of efforts and achievements made along the improvement of these recoveries. Charging of losses impacts on the cost of electricity,” Ms Gathungu told MPs.

The Chairman of the National Assembly Committee on Energy, Vincent Musyoka, expressed that the Auditor-General’s findings confirmed long-standing fears among Kenyans regarding exaggerated power bills.

“The data by the Auditor-General are scary and capture the fears of this committee and Kenyans have been having all along,” Mr Musyoka said.

Kenya Power’s managing director, Joseph Siror, acknowledged inevitable losses in power transmission but cited efforts to address the issue through collaboration with power producers and measures to curb illegal connections.