This archive report was first published on 29 December 2021.
Wednesday, December 29, 2021, marked a significant development for Kenya Power as the company wrote off Sh15 billion in bad debts from unpaid electricity bills.
According to the company's annual report, the Sh15 billion impairment represents half of the Sh29.6 billion unpaid electricity bills as at June 2021.
Kenya Power's decision to write off the debts is based on the company's confidence in collecting only half of its pending power bills that are uncollected for up to three months.
However, the company has lost hope of recovering Sh14.5 billion that is overdue for more than three months, forcing it to make provisions for Sh13.7 billion of the outstanding power bills.
"It means Kenya Power is provisioning, which is an accounting charge on the balance sheet, if they collect it will be written back, if not there will be a separate accounting for writing off," said Nikhil Hira.
Households or domestic power users top the list of defaulters with about 60 percent of the outstanding bills, followed by SMEs and commercial customers.
This marks a shift from the past, where large power users – mostly manufacturers – were the top defaulters.
