KPLC has bright plans for the future

February 25, 2009
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, NAIROBI, Kenya, Feb 25 – The Kenya Power and Lighting Company (KPLC) has announced plans to retire some of its emergency power plants to ease the burden of high bills for consumers.

KPLC Managing Director Engineer Joseph Njoroge explained on Wednesday that emergency power is expensive as it relies on diesel fuel, which is passed on to electricity consumers.

“To mitigate the continued high fuel costs, there are three plants that are expected to come on stream, which will inject a total of 113.5 Megawatts (MW). Once we get these plants running, then we will not need the emergency power,” he said in reference to the 35MW that is being generated by Orpower 4 geothermal station at Ol Karia.

Others are Mumias Cogeneration and IberAfrica Power, which are soon expected to add 26MW and 52.5 MW respectively to the national grid.

Currently, the country has a total emergency capacity of 146 MW, which had been installed to assist in meeting the rising power demand. The emergency (power) generating facilities are run by Aggreko plc.

The use of diesel fuel in electricity generation has significantly contributed to the increase in the fuel cost charges, which is a major component in the computation of an electricity bill and which in July last year stood at Sh7.78 per kilowatt hour.

On whether the company could effect another reduction in power bills, Mr Njoroge said it was dependent on whether the country would receive sufficient rain at the onset of the long rains in March.

“If we get enough rains, then it means that we will get more power from hydro-generation and reduce thermal generation,” he said while explaining that less thermal based power would be used, which would in turn bring down electricity costs.

Currently, consumers are paying about Sh4 per kilowatt hour as the fuel prices continue to come down and after the government effected a four percent reduction to 12 percent in the Value Added Tax on electricity energy.

He however maintained that for sustainable and affordable electricity for all, the country needs to diversify the sources of power in order to reduce the reliance on hydro-based power.

Mr Njoroge spoke during an investor briefing where he announced that KPLC recorded a 53 percent increase in its profit after tax to Sh1.46 billion in the first half of the 2008/2009 financial year.

The MD credited this performance to an increase in the electricity revenue, which went up from Sh12 billion to Sh18.6 billion mainly due to the tariff increase that became effective on July 1, 2008.

“Turnover in the six months from July to December rose to Sh36.53 billion compared to Sh19.7 billion the previous year,” he boasted.

He added that despite the ongoing economic challenges both in the international and local market, he was optimistic that the future prospects for KPLC were bright.

He pledged to continue investing in the existing electricity networks and innovative technologies to improve the quality of power supply, customer service and revenue collection.

During the meeting, Eng Njoroge announced that the board of directors had approved an interim dividend of Sh2 for each share held, which is a 100 percent increase in the payout from the previous year.

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