@guru - Just buy them while they are cheap

And about inefficiency; which are we talking about? Is it technical loss due to faulty and/or poorly maintained transmission system; OR commercial loss due to theft by consumers [e.g. Mungiki connecting slum dwellers and people slowing down their meters]?

@mukiha you are very right.. the high fuel charges are just a result of moving away from hydro to fuel... KPLC said that it were to revert to hydro power then we would only be paying sh3.5 per kwh... i think the company has a right to maintain profitabilty and shareholder value...

My average buying price on KPLC was 135 when everyone was dumping it last year. I never quite understood why it sunk so low but it was a good buy opportunity. I was hoping to get a 1:10 share split and a fair value price of 30/- after the split by June this year. I had hoped i would get enough capital gains to afford a road trip to SA for the world cup...I will ever pray
KPLC still has a lot of work to do to improve on the transmission and distribution systems and it will require a lot of resources to do that almost 25 billion. Does anyone have an insight on how KLPC is planning to raise that amount i.e debt or a rights issue
If they are planning a rights issue they seriously need to work on their corporate image.

@vvs. Who is the bad guy here? International Oil Producers, Illegal Loggers, KRA, Poor Slum People or Criminals, (all the above)...I think people need to know who to blame first b4 they see things objectively...

All ino is I'm paying for KenGen/KPLC to be profitable, so I don't particularly think the utility companies have the right to be over profitable (set their own ROA). I think they just have to be profitable given their monopoly and our reactive policy toward power deficits.

@mukiha. Would it be a good idea to allow either local or foreign IPPs (irrespective of clean/fossil fuel based) to by-pass the national grid and build transmission lines directly to large elec consumers...why hasn't the govt allowed this? Why was transmission and distribution separated, between KPLC and KETRACO?

@subidu - ROA for KPLC is lower than it should be. They have not revalued assets. After that the ROA would be very low.

IPPs can sell directly to large consumers but IPPs dont want the hassle of collections, etc... so KPLC bears that cost... and shud be paid for it...

So VVS taking into account a capital intensive generating business like KenGen...it revalued its assets in 2007 they rose over 50%, so the returns should match this (possibly growing by multiples every 5-10 yrs)? Well that's sounds kinda expensive...for me and the economy...every few years.

Well I didn't know IPPs could sell directly to large consumers, I assumed KPLC/KETRACO had monopoly to transmit and distribute power...but definately something that may attract foreign investors...As an end user, maybe a large Kenyan manufacturer, like Bamburi Cement, I'd probably consider any proposal that would by-pass KPLC and but connect me be directly to an thermal IPP (negotiate the charge).

With regard to Lake Turkana Wind Power (LTWP) and the transmission line they intend to build into the national grid...they signed a BOOT [Build Own Operate Transfer] with KPLC (sort of concessionary agreement methinks)...so if I was LTWP...why would I go through the trouble of building a 300MW plant, investing in a transmission line then decide to use KPLC to collect the money from large elec consumers like Bamburi Cement...the hassle of collections would seem rather trivial...

Large consumers buy about 2,000 GWH...thermal IPPs like Iberafrica supplied about 344 GWH. If I was them I'd consider bring diesel generators close to major manufacturing hubs and build a line directly to these customers. Maybe this is the next best idea in the energy field...that's if IPPs are actually allowed to supply power directly to consumers...avoid those pesky power purchase agreements.