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Kenya Power eyes debt collectors to collect Sh35.69B defaulted bills

Kenya Power token metres. (Photo: File)

By Ibrahim Omar | Saturday, February 10, 2024

Government ministries, departments, and agencies (MDAs) and county governments are the main defaulters on power bills.

Kenya Power is seeking to hire debt collectors to recover more than Sh35.69 billion in unpaid electricity bills that customers have defaulted on paying.

The power distributor has issued a tender for debt collection services as it looks to recover part of the outstanding bills that customers have failed to pay over the years.

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Government ministries, departments, and agencies (MDAs) and county governments are the main defaulters on power bills.

The draft 2024 Budget Policy Statement (BPS) shows that counties owed Kenya Power Sh3.49 billion as of September 2023, with Nairobi County alone owing Sh2.17 billion.

“The amounts have been accumulating over the years. Consequently, the National Treasury has issued a circular to county governments reminding them to settle debts owed to KPLC and ensure that these pending bills are included in their budgets and repayment plans,” said the Treasury.

To try to recover the outstanding debt from customers, Kenya Power will deploy debt collectors across the country. This is, however, not the first time that the utility has resorted to private debt collectors.

The power firm has previously hired the debt collectors, who are usually paid a portion of the amount of money that they manage to recover from the defaulters.

Kenya Power has been facing an increasing problem of defaults, especially from postpaid customers who fail to pay when payment comes due.

The problem has become worse due to high electricity prices, which has made it harder for some customers, especially large power users such as manufacturers, to afford electricity.

Kenya Power usually charges a deposit of a minimum of Sh2,500 to be connected to the grid, which partially covers defaults.

The firm says that it is employing a number of strategies that have proved largely successful in recovering debt from non-paying customers.

It said this includes disconnections, increased internal debt management capacity, the use of third-party debt collectors, a focus on early identification, and the requirement for higher security deposits for defaulting customers.

Besides disconnections, Kenya Power has also been racing to install prepaid and automatic metres to reduce defaults.