Electricity firm Kenya Power plans to raise the number of prepaid meters in the country to 500,000 by 2015 to cut the risk of consumer default. The firm has since 2009 installed 118,698 such meters or 6.7 per cent of its 1.7mn customers and the deepening of the billing system is expected to boost its cash flow and lower cost on reduced need for meters. Its unpaid bills has risen to KES7.4bn in the year to June compared to KES5.2bn in a similar period last year, meaning that the additional bad debt was equivalent to 54 per cent of its KES4.2bn net profit. “The company is currently installing prepaid and automatic meters as strategies to minimise the risk of non-collection,” Kenya Power said in a statement. “This technology enables customers to manage their electricity consumption costs; and the company to reduce commercial losses and congestion in the banking halls.” Consumers on prepaid meters use units of power they have paid for in advance, similar to mobile air time top-ups, helping Kenya Power to receive its revenues in full while reducing the need for meter readers who are sent to households or businesses. The new meters are expected to seal the loopholes in the current postpaid system which consumers have exploited, leading to defaults worth billions of shillings. The rollout of more prepaid meters is part of the company’s medium term plan to cover 1.3mn domestic and SMEs under the new system. However, an estimated 100,000 large, industrial consumers whose core activities require un-interrupted power supply will be allowed to remain on the post-paid system at the end of the phased migration. Mr Renaldo D’Souza, an analyst at Genghis Capital, said Kenya Power stands to significantly boost its cash flow position and lower its operational costs by rolling out more of the new meters, especially if it can ensure that they are tamper proof. The prepaid metering look set to reduce the mounting unpaid bills and reduce the pressure on its wage bill on reduced need for meter readers. The company’s total workforce rose to 8,543 employees in the year ended June compared to 7,279 employees a year earlier, a move that raised its wage bill by 14 per cent to KES9bn from KES7.9bn. The plan to hook 500, 000 households to pre-paid meters is set to create thousands of jobs as the power company taps agents. This will be akin to businesses run by mobile operators who have created more than 100,000 jobs.