KPLC to pilot off peak tariff

April 13, 2011

, NAIROBI, Kenya, Apr 13 – The Kenya Power and Lighting Company says it will soon start implementing pilot projects for off-peak tariffs around the country.

Managing Director Engineer Joseph Njoroge says the company and the Energy Regulation Commission will identify towns around the country for the pilot project once the ERC reviews tariffs.

He also added it would be difficult for price harmonisation among the EAC market.

“The ERC, which is the regulator, is already thinking about a pilot project for off peak tariffs. It is difficult to say when, but probably in the next tariff review, it is most likely to be brought aboard,” he said,

He added: “It is very difficult to harmonise the price for electricity within the East African Community market, because different countries have different priorities, they have different subsidies and they also have different sources of power, so it depends on what their sources are.”

Speaking while presenting KPLC’s five-year strategic plan (read the full plan here), Eng Njoroge also revealed customers will soon be able to pay their electricity bills by direct debit.  He further added that the company is looking to increase revenues by selling more units.

“Yes, we are soon going to officially launch the direct debit option, but it has already started being put into use with certain banks. When we reduce our losses, it impacts directly on the bottom line,” Eng Njoroge said.

“This means that, for every so many units we buy, we are able to sell so many units. That is what loss is about, it is efficiency. So if you can reduce the losses, it means you need buy less to sell the same number of units, in turn meaning costs will go down thus increasing revenues.”

The power supplier says it wants to be at 84.5 percent system efficiency for the 2011/ 2012 financial year with its 5 year goal to be at 85 percent by the end of 2016.
It further says it has cut down customer average interruption index from 4.4 hours in 2009/ 2010 with its goal to be 2.5 hours by 2016.

In addition to publicly tendering low cost core projects, new electricity sources will include Public Private Partnerships and private investor projects under the Feed In Tariff Policy so as to facilitate sufficient investment in electricity generation facilities.

The companies five Year Corporate Strategic Plan will effectively contribute to the Vision 2030 Medium Term Plan and thus facilitate electricity demand growth, the following actions will be taken:

– Raising the efficiency and quality of existing electricity infrastructure through reinforcement and upgrade projects
– Implementation of new infrastructure projects within specific time frames
– Regional interconnection with Ethiopia as a major source of imported electricity to minimise future risk of generation capacity shortfall
– Emphasis on green energy sources in the least cost power development plan, in particular geothermal and wind power sources.
– Implementing electricity pricing strategies to ensure that new electrical infrastructure lowers the cost of doing business and increases competitiveness of the country

– Peak demand, now at 1,178MW in 2010/2011 grew at an average of 5.7percent over the past 5 years, with the reserve generation capacity margin progressively declining to 2.2 percent in 2009/10
– Peak demand is projected to rise to 2,243MW by 2015/16, an annual average growth of 13percent based as envisioned under Vision 2030 economic targets 
– To meet projected demand, an additional 1,749MW of firm generation capacity will be installed between 2011/12 and 2015/16.

KPLC also plans to install 200,000 meters per year for new customers.

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