Billings and receivables in electricity industry

Ikeja-Electricity-Distribution-CompanyIN the service industry, one can never eliminate accounts receivable due to the need to certify services provided, upon which payments are based. The service provider owes the duty to prove that services contracted have been delivered in the right quantity and quality. Disputes can and often arise with regards to these two issues. Resolutions often involve discounts, where service quality is below par, and sometimes, resolution may involve the issuance of credit notes.

With regards to infrastructure, the need for accurate and transparent billings is a sine-qua-non. The curious case of Nigerian electricity billings and receivables include the situation, where a utility service provider would brazenly continually provide bills on estimation, the basis of which is unknown to the consumer. The service provider fears no dispute nor loss where he makes no attempt whatsoever to provide a means of ascertaining the quantity or quality of services rendered.

Another curious case in the Nigerian electricity industry is that in which an MDA will obtain appropriation in the annual budget for utilities and still refuse to pay the service provider for continuous periods. The question is, “what happens to the funds appropriated for that purpose?” Another question is, “how would such an MDA obtain an appropriation for the settlement of utility bills (power) for previous physical periods without being queried?

In Nigeria, the art involved in power billing to the individual consumer consists mainly of the art of pole-climbing – the popular extortionist tactics of NEPA – PHCN – DISCOS. It also includes the sneak distribution of bills when the consumer is most unlikely to be available to challenge the bill.

Another component of this art is the haggling and negotiations involved in arriving at the non-disconnection or on-the-spot reconnections fee. The final component of this art is the skill involved in arriving at the estimation. The marketing officers take casual inventory of the type of car the consumer uses, his fashion preferences, and possibly the facial ambience of the property occupied. These are the requirements for providing an expert judgment of power consumption – no meters required. In other climes, meters are the only basis for charging utility bills?

With the level of technological advancement and knowledge freely available, I can bet with any Disco that a set of junior secondary school kids will design a tamper – proof App that will ensure electricity meters cannot be circumvented. Personally, I can design such meter for any willing Disco at less than one million naira and a royalty of 2% of the value of any such meter deployed by them.

The greed of the Discos is the major factor at play here. The continuous issuance of estimated bills is nothing but extortion from the helpless individual consumers to make up for the shortfalls from MDAs who are powerful enough to resist the monthly balloons of estimated bills.

I believe its high time government beamed its searchlight on the regulators in the electricity industry (NERC) to ascertain why they are reluctant to apply the sanctions in the privatization agreement or relief to the consumers. How can we explain a situation where a consumer has been placed on estimated billing for years without being offered a meter? Obviously, the service provider “does not give a dam!”

• Aibangbe is a Media and Energy Relations Consultant in Lagos.



2 Comments
  • emmanuel kalu

    it is pure looting, which they have cover with the help of NERC as legal. our leaders continue to watch as this power companies continue to loot Nigerian’s. however it is also consumer that fail fight back harder. one, we don’t get electricity from the disco’s, at least not at a decent amount or duration. so most of the electricity comes from generator. so what is the point of paying the discos this looting amount. Let them disconnect you, then you can use your money to generate you own electricity. until the people seriously fight back, until they pour on to the street and demand meters, steady electricity and good customer services, these discos along with NERC would continue to loot Nigerian’s.

    • amador kester

      Yes one word summarily describes the power sector and its regulators as presently constituted: big scandal

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