Kenya Power bets on technology to curb defaults, cut costs

By Semaj Itosno, Nairobi, Kenya

Kenya’s electricity distributor, Kenya Power, is employing technology to cuts its metering maintenance costs and deter customer defaults.

Following the success of its pay-before-use program, the company intends to raise the number of pre-paid meters by 520,000 by June 2013 in a bid to improve revenue collection.

Kenya power chief executive officer, Joseph Njoroge said the new technology would eliminate risk on non-payment of electricity charges. The system also eliminates need for meter readers.

“Prepaid metering project was initiated to improve the company’s services to its customers by giving them control over power supply, eliminate estimated bills, improve billing accuracy and also eliminate disconnection and reconnection of power,” said Mr. Njoroge.

Under the pre-paid system, consumers buy utility units in form of scratch cards.

Consumers on prepaid meters use power they have paid for in advance, similar to mobile air time top-ups. This means Kenya Power will receive its revenues in full as defaults will be a thing of the past.  The firm has been losing billions of shillings in unpaid customer bills and illegal connections.

Another benefit of the pre-paid model is that it reduces congestion in the banking halls since consumers will not need a third party to pay their bills.

The new billing model would seal the loopholes in the current postpaid system which consumers have exploited, leading to defaults worth billions of shillings.

The pre-paid model would also help consumers manage their bills since they would be more conscious to cut costs.

The upscaling of the project follows a successful pilot testing that started in April 2009.  Since then, firm has installed 174,810 such meters, which is 8.2 per cent of its 2.1 million customers.

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