Thursday, January 26, 2012


On the 9th of November 2011, the Standard Newspaper(Kenya), carried an article under the heading" High Power bills shock customers". A Nairobi resident, Simon Kamau said that he was" convinced that Kenya Power is out to fleece him". Kamau claimed that since Kenya Power replaced his old meter with a new prepaid one( No 0145358195), his elecricity bill had quadrupled.The article continued to state that "it was an outcry from all the way from Mombasa" that bills had skyrocketed. "The customer is king" goes the saying. How are Kenya Power customers kings then? What power do customers like those of Kenya Power have over their suppliers? Do they have power to dictate how their suppliers do business? In my view, Kenya Power customers have the say in the way the company can conduct its business. The job of a customer is to teach the supplier how to do business. Consumers would have been consulted before Kenya Power decided to replace the old meters with the prepaid ones. Although the installation of smart meters is one of the best ways the company can get accurate meter readings, and get its money upfront, customers would have had a say because they are the ones who were going to be affected by that change.
     Smart meters(prepaid) are not all that accurate. In the USA, " the race to install smart meters is starting to lose momentum" reports Bloomberg Businessweek of September 20- September 26, 2010. Under the article" Smart Meters May Not Be So Clever", the article continues to state that " In Hawaii, regulators rejected$115 million plan in July by Hawaiian Electric to install smart meters that residents and businesses would pay for. Almost a dozen California cities and counties have asked regulators to halt installations, saying the devices send inaccurate data to utilities. Home owners in Bakersfield Califo; have filed a class action against PG&E, accusing the utility of overcharging since smart meters were installed in houses". The article continues to state that " The meters don't benefit the consumer; they cost a lot of money, and we can't opt out", says Joshua Hart, the California -based director of Scotts Valley Neighbors Against Smart Meters.
      Although these customers' claims may not be justfied, their concerns must be addressed, and it is up to the utilities to convince them that the meters do not overcharge, or send inaccurate data to the utilities. But why are the customers complaining of huge bills? Definitely, the cunsumers have a point. Why the drastic jump?When the Californian consumers complained, PG&E responded by saying that " A study by independent consultant, The Standard Group found that PG&E's smart meters are more accurate than the older versions they replaced. PG&E spokesman Paul Moreno says that the meters will save customers money over long term". The question now comes: were the old version meters inaccurate; and if so, how? Are utilities losing if they continue using old version meters, or will the customers lose if they use the smart meters? Where is the truth about these two types of meters? This is what the utilities need to address.
    Kenya Power customers should know that they have the right to know about these so called smart meters. As   customers, it is their right to be heard. Ludwig Von Mises as stated that "The fundamental law of the market is: the customer is always right". Customers should therefore use that right, to teach the supplier how to do business. Ludwig further states that " The real bosses in the capitalist system of market economy are the consumers.They, by their buying and by their absetention from buying, decide who should own the capital and run the plants.They determine what should be produced and in what quantity and quality.Their attitudes result either in profit or in loss for the enterpriser.They make poor men rich, and rich men poor. They are not easy bosses". So what Mr Kamau and other Kenya Power consumers should know  is that they are the bosses, and not the Kenya Power.They by their  buying power,will make the company poor or richer.They can therefore dictate how the company does business; can they allow it install smart meters or not?

1 comment:

  1. The original blog stated that there are 26 countries un the euro-zone, but they are only 17. sorry for that mix up.