Costing plan for new power connection out

By WINSLEY MASESE and WILFRED AYAGA

Kenya: Heavy power consumers will start paying higher electricity connection fees in a new plan by Kenya Power.

The plan, however, hands new customers close to the power grid some reprieve, as they will pay the old rates.

The firm yesterday said it would retain the old connection rate of Sh35,000 for customers close to electricity grids who are seeking a single-phase connection and whose total connection cost would not be above Sh135,000.

Customers whose homes and premises are located some distance away from the grid will, however, have to pay new rates that will be determined by the distance.

New customers applying for a three-phase connection – who in many instances own businesses that consume electricity heavily – will also pay new rates determined by distance.

The company said the new plan would entail use of thinner poles and conductors to keep the costs down.

“The company will continue to charge Sh34,980 to connect power supply to applicants whose cost of new single-phase connections is up to Sh135,000, inclusive of VAT, with the balance of Sh100,020 being the cost of pre-investment by the company,” said Kenya Power in a statement yesterday.

“Applicants whose cost of new single-phase connections is over and above Sh135,000 will be required to pay the full amount to facilitate connection to the grid. Applicants for three-phase power supply will also be expected to meet the full cost of connectivity.”

The firm has in the past said connecting a customer within 600m of the grid costs Sh135,000 and it usually has to foot the difference.

The current rates were put in place in 2004 but the firm has argued that other costs, including raw materials, have since gone up.

Its proposal last year to increase the charges to Sh75,000 for a single-phase and Sh85,000 for a three-phase caused an uproar, forcing the company to rescind the plan.

Kenya Power Managing Director Ben Chumo yesterday told the Parliamentary Committee on Energy that the firm would also use thinner conductors and poles to keep costs down.

“We aim to reduce the size of an electricity pole from the current 160mm in radius to 140mm, and the same applies with the conductor,” he said.

With increased efforts to increase electricity penetration at a subsidised rate, Chumo said the firm lost Sh7.5 billion.

As a consequence, the Government, through the supplementary budget, allocated the utility firm Sh2.7 billion to enable Kenyans get connected.

“However, many Kenyans understood that the amount was to enable them get connected at a lower rate and more than 27,000 Kenyans applied,” he said.

Chumo said that over Sh1.1 billion was realised from the exercise but they are not able to make any new connections.

“We are waiting for a study commissioned to come up with findings to inform the new charges,” he told the Jamleck Kamau-led committee.

However, committee member Mithika Linturi questioned why the utility firm charges high rates yet some of the infrastructure was developed by the Rural Electrification Authority and the Kenya Transmission Company (Ketraco).

Out of the 27,000 applicants, Chumo said they would try to connect about 8,000 who are near the network. The rest will be considered once the study is made available.

— Additional reporting by Macharia Kamau