The rainy season in Kenya is synonymous with prolonged and frequent power outages. As I write this, I am seeing very many tweets from people complaining of going three days in a row without power in their homes. Kenya Power seems overwhelmed in ensuring reliable supply of power to many of its customers. There have been calls to end the Kenya power monopoly by licensing other independent power utility companies to compete with Kenya Power. I have even discussed how this monopoly can end in a previous blog post here.

One thing worth noting however, the Kenyan situation is fairly better compared to the situation in Nigeria or Angola. For example, in Lagos, power is available only about 35% of the time and people have to depend on private generator sets to cover for the deficiency. in Nigeria fuel is 1/3 times cheaper than here in Kenya and the use of personal gen-sets in Kenya is therefore an expensive affair.

I have also discussed on a previous post on how the introduction of a Demand Response Provider can help lower the level of investment in power generation systems in the country by eliminating or leveling off the peak power demand curve. I would like to revisit the issue of the use of demand response providers but from a slightly different angle.

Negawatts

As opposed to Megawatts which is a measure of quantity of power consumed, Negawatts measures the quantity of power NOT consumed (in essence negative watts). Assume your house consumes about 10 Kwh power day like mine. If for some reason there is no power supply to my house for a day then my Negawatt consumption is equal to the power I have not consumed = 10. At the current tariff, a Kwh is about 18 shillings bringing my total daily power consumption to 180 shillings.

So if we price Negawatts at a rate of 25 shillings, then if there is a blackout in my house for a day then the cost of Negawatts “consumed” is 250 shillings. This will be the amount the utility provider owes me for not consuming power (either though my own deliberate action or by a provider caused blackout).

This therefore means me not consuming power costs Kenya Power more than if I consume power. What will happen is that this Negawatt tariff will essentially be a penalty of sorts to the Kenya power management and staff for not providing me with power, the Negawatt cost will come from their profits and bonuses. There is no reason why Kenya power should declare a 6.2Billion Shilling profit in the wake of very unhappy customers, some of these profits should be used to pay off aggrieved customers who have lost business and comfort due to their inefficiency.
This therefore means Kenya power will get penalized by their consumers by the hour for blackouts caused at a rate higher than if they would have supplied electricity to these consumers.

At the rate of 18 shillings per Kwh, my monthly bill of power consumption will be approximately 180 x 30 = 5400 shillings, assuming i experience blackout totaling to 10 days, then my power bill becomes without Negawatts penalty is  (180 x 20) =3600. However, with Negawatts penalty it becomes (180 x 20) -(250 x 10) = 1100 Shillings. So Kenya Power gets penalized 2500 shillings for the loss suffered by my business or home due to lack of power which i am now so dependent on.

This set-up will spur Kenya power to improve on their response times, invest in more robust distribution networks and increase staff output as they all work towards now losing money due to inefficiency.

At the end of the day, the customer will enjoy better power supply and Kenya power will not lose money due to Negawatt payouts to consumers.

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