No roadmap yet out of power sector misery


• Huge Debt Crippling Value Chain
• DISCO’s Are Ripping Off Electricity Users -Consumers
• Its Impossible To Metre Every Consumer -Discos
• Estimated Billing Lack Transparency, Unreasonable -CPC

Upon retirement from the civil service as a pharmacist, 70-year-old Chief Mrs. Ladun Lawal, set up a small outfit to produce pain-relieving ointment in her father’s property in Ife, Osun State.

At inception in 2014, settlement of electricity bills was a non-issue. But by 2015, things took a dramatic turn and her electricity bill jumped from N35, 000 per month, to about N100, 000. The surge eclipsed all that she made from the business on a monthly basis.

As she was still lodging her complaint, her monthly electricity bill got crazier and skyrocketed to N250, 000, far too much for a past time job.

“I only spend three days a month to produce my ointment and most of those days electricity was hardly available. I usually make use of gas as a form of energy to produce my ointment. This is the reason that I wondered how I was able to consume so much power for three-day usage,” Mrs. Lawal lamented.

At the Benin DISCO, where she made a formal complaint and requested for a pre-paid meter, she was asked to pay N80, 000 for the device, which she did and the metre installed in her premises shortly afterwards.

The next hurdle propped up when she returned to Benin DISCO to recharge the metre only to be refused the service on the ground that she needed to offset the old bill. She was even told that her bill had increased to N260, 000.

With the turn out of things, Lawal regretted industrialisation would remain at infancy, as no industry would survive under the present obnoxious billing system.

Also, when Kara Madugoro moved into a two-bedroom apartment in Igboegon, in the Lekki area of Lagos State with her mother and two siblings, she never thought that paying for electricity bills would be such a tough task until she was served the first bill of N10, 000 for a month’s consumption of electricity.

She was still lamenting her predicament when the bill for the second month arrived, and it was double the amount. It followed that pattern and soon climbed to N60, 000.

Kara laid a complaint to Eko Electricity Distribution Company (EKDC), where she was advised to settle the N60, 000 latest bill, while the issue of crazy bill was being resolved. She complied.

Immediately, she cleared the debt, the next bill that she received was N65, 000, for another month of electricity consumption. The bill kept on increasing until it reached N250, 000.

Now in dire need of a solution to her predicament, she advised the EKDC to disconnect her apartment from the public power supply, while she resorted to the use of her electricity generating plant for energy supply.

Surprisingly, despite being disconnected from public power supply, EKDC continued to supply her phantom electricity bills, and the last one rose to N600, 000, six months after being disconnected from the public power supply.

Kara said: “I was surprised that despite being disconnected from public power supply, I was still receiving bills. The marketers were still coming around to disconnect my electricity line, which they had earlier disconnected. This clearly shows that there is something wrong with the whole system, especially the notorious estimated billing of consumers.”

The Guardian investigation showed that consumers have continued to complain bitterly to various electricity firms about crazy bills, as well as, made requests for pre-paid meters, but little or nothing has been done by the concerned firms.

At the New Town, within Amuwo-Odofin, the situation is not different as consumers are forced to part with amounts far above what they are consuming. For instance, an occupant of a two-bedroom apartment was slammed with a N22, 000 monthly electricity bill, which is far higher than the N1, 500 monthly consumption by another resident with the same amount of consumption.

A former Secretary-General, Amuwo-Odofin New Town Resident Association, who has a pre-paid meter, Mustapha Shitta-Bay, said that residents have made formal complaints to Ikeja Electric Distribution Company (IKDC) but the problem still lingered.

Customers of Benin DISCO are also lamenting the outrageous electricity bills that they are being charged.

Before Benin DISCO came on board in Ekiti, the maximum consumption per house was less than 150 kilowatt per hour, but now it has increased to between 300 to 450 kilowatt per hour.

The Chairman, Ekiti Landlords and Landladies Electricity Consumers Association, Dr. Ogundipe said: “People with prepaid meters are not consuming up to N3, 000 in a month. We told Benin DISCO that we would not pay anything more than N3, 000 per month on any bill they bring. Someone was paying N2, 000 before and they suddenly increased it to N10, 000 and then to N15, 000.

Discos’ Unethical Practices
Not many electricity consumers are aware that it is not their responsibility or that of their communities to buy, replace or repair electricity transformers, poles and related equipment used in the supply of electricity, according to rules of the Nigerian Electricity Regulatory Commission (NERC).

But the reverse is the case in Nigeria, as consumers now buy transformers and electricity poles due to the inability of the DISCOs to provide all these.

Overtime, DISCOs have deliberately abandoned their responsibility of providing electricity transformers to communities, thereby forcing residents to resort to purchasing their transformers in order not to remain in darkness.

According to NERC’s regulation, any un-metered customer who is disputing his or her estimated bill has the right not to pay the disputed bill, but pay only the last undisputed bill as the contested bill goes through the dispute resolution process of NERC.

It is the customer’s right to be notified in writing ahead of disconnection of electricity service by the DISCO serving him/her, in line with NERC’s guidelines. All customers have right a to refund when over billed.

Furthermore, any community, which cannot afford expensive power assets, which consumers are often made to sign off as donation to the DISCOs is often left in darkness.

Example of such community is the Isiala Isiugwu Autonomous Community in Ugwunagbo Local Council of Abia State, which has remained in darkness due to its residents’ inability to purchase transformers, cables and poles.

The traditional ruler of the community, Eze Harry Ugwuala, said they were yet to enjoy electricity as a transformer attracted to the community by a former member of the House of Representatives, was yet to be installed since the community cannot afford the cost of installation.

According to him, the community has written several letters to the Abia State government, but nothing has been done.

“Since the creation of Isiala Isugwu Community, we have never had electricity. We have made communal efforts to lay some poles, but the cost of electricity project is too high and we can’t afford it. It is shocking that in this age of globalisation, the five villages that make up the community have never seen electricity. The situation has impeded development in my community,” he said.

Worried by the spate of protest associated with the excessive billing of electricity consumers, the House of Representatives recently threatened legislative action against perpetrators.

Chairman, House ad hoc Committee on Curbing Excessive Electricity Charges, Israel Ajibola, said the House has been inundated with allegations of excessive billing, and Discos’ refusal to provide metre, in preference for estimated billing.

He cited other complaints made by electricity consumers as non-compliance with the connection/ reconnection regulations and installation of manipulated pre-paid meters.

NERC’s Inefficiencies And Attempt To Close Metering Gap
Established by the Electric Power Sector Reform Act of 2005 to undertake technical and economic regulation of the country’s electricity supply industry, the NERC determines operating codes and standards, establishes customer rights, and obligations and sets cost reflective industry tariffs.

Its objective also includes ensuring constant and reliable power supply, which is critical to the growth of the country’s economy.

Through appropriate regulations, the commission is also expected to ensure that the nation gets safe, adequate, reliable and affordable services in the generation, transmission, distribution and trading of electricity.

In addition to this, the commission is charged with the responsibility of ensuring that consumers fulfill their obligations by paying for power used and their interests are protected.

On this score, the reverse has been the case as NERC has been unable to resolve complaints brought before it by individuals and communities.

For example, Onilekere Community in Lagos, which comprises of Shodeke, Egba, Oluyemi and Okitipupa streets in the Cement area of Alimosho Local Council of Lagos State, had dragged the IKDC to NERC via petition No. IFO/1096/2017, on the January 24, 2018.

Despite the ruling that residents of the community should be provided with pre-paid meters within two weeks from the date of the ruling, which had expired since February 8, 2018, the company has failed to provide them with the pre-paid meters as ordered by NERC.

The Bale of the Community, Chief Toyin Oko-Osi said that the figures in the bills were intentionally inflated in order to exploit and over bill consumers for services not rendered by IKDC.

Another electricity consumer under the EKDC, Olorogun Emadoye, petitioned NERC over crazy and unreasonable bills sent to his house. Months after, he is yet to get positive response from the agency.

In the petition, Emadoye said the crazy bills grew from N5, 000 in February to N19, 000 in March, N21, 000 in April and N34, 000 in May 2018.

In the letter, he said: “I am a four-children family man living in a four bedroom apartment. Two of my children are in boarding school. At the moment, only two bedrooms are utilised. I can easily compare my utility to my six-bedroom office in Ilupeju, where there is better availability of electricity by all standards, and yet we use a range of about N12, 000 to N16, 000 on our pre-paid metre per month.

“I am a responsible citizen and pays my bills promptly but this crazy bill is discouraging.”

Despite complaints like these, NERC insists that it has been carrying out its duties effectively, adding that it has introduced the Meter Asset Providers (MAPs) towards the achievement of the three-year metering targets prescribed by the agency.

The commission also maintains that it had approved a regulation that provides for the supply, installation and maintenance of end-user metres by other parties approved by it. The regulation it said, is expected to fast-track a closure of the metering gap and encourage the development of independent and competitive metre services in the electricity industry.

Head, Public Affairs Department of NERC, Dr. Usman Abba Arabi, noted that there are no free meters even under the current tariff regime as all customers, including those on estimated billing, currently pay for a return on the investment made by electricity distribution companies on metres in their networks.

According to him, under the new MAP regulation, customer classes shall be amended to ensure that customers only pay for metres when a meter is physically installed in their premises.

“The electricity bill of customers provided with a metre under the new regulatory framework shall comprise of two parts – energy charge and metering service charge. The payment of metering service charge will be removed from the customer electricity bill upon the full amortisation of the metre asset over its useful life. All faulty metres are expected to be repaired or replaced free of charge within two working days, except in instances where it is established that the customer is responsible for the damaged meter.

“In pursuit of promoting local content, the new MAP regulation mandates the investors to acquire a minimum of 30 per cent of their metering volume from indigenous meter manufacturers. This local content threshold may be adjusted by the commission from time-to-time, in line with the verified manufacturing volume of local manufacturers.

“The performance of Meter Service Providers shall be governed by the provisions of the Meter Asset Regulation, technical codes of the electricity industry, and a Meter Services Agreement/Service Level Agreement signed with the distribution companies,” he said.

DISCOs Insist Metering Every Customer Is Impossible
Distribution companies insist that it is impossible to metre every customer due to the absence of cost reflective tariffs and lack of adequate funding mechanism.

The Director of Advocacy and Research, Association of Nigerian Electricity Distributors, Sunday Oduntan, said that the 11 DISCOs would need about N305b for five years to provide metres, maintain their networks and perform other obligations, out of which N299b will be used to close the metering gap of 4.1 million.

Oduntan said that any new legislation should consider the historical challenges of the DISCOs, which include non-cost reflective nature of the electricity tariff, which has created a significant market shortfall of over N800b.

To ensure a reduction in estimated billings, he said its members have ensured the 100 per cent metering of all maximum demand customers in their networks; adopted check-metres to measure consumption to ensure fair bill estimation and adjust bills of customers if there are errors.

The Chairman of Egbin Power Plc, Mr. Kola Adesina, is equally of the view that it is certainly impossible to metre every customer in the country. “When I hear arguments about metering, I wonder because we argue that what should come last should come first. Estimated billings is a universal phenomenon, it is not a Nigerian thing; so everyone should not assume that it is only in Nigeria that there are no enough metres. It is definitely and certainly impossible for the universe as we have it today to be metered. That is the reality.

“Government had the privilege of running these utilities for 53 years. Unfortunately, during the period, government could not meter 10 per cent of the consumers and suddenly five years down the line, government wants us to do the magic. This is not possible if the fundamentals are not there,” he said.

Privatisation Of Sector Far From Yielding Expected Dividends
The provision of regular, affordable and efficient electricity supply is critical for economic growth and rapid industrialisation, but various attempt by successive governments at industrialisation and rapid economic growth have been hampered by energy infrastructure deficit.

This led to the privatisation of the power sector on November 1, 2013, with the formal handover of the successor companies to private investors as six generating companies (GENCOs) and 11 distribution companies (DISCOs) and the establishment of the TCN.

Despite the privatisation of the DISCO and formerly government-owned electricity generation companies, not much improvement have been seen in the electric power sector.

The DISCOs claims they have not been able to make substantial improvements to the distribution networks they cover due to paucity of funds, and inadequate gas supply to power generation plants.

For example, Nigeria’s electricity generation capacity dropped from the 5, 222.3mw attained earlier this year, to 2, 329.9mw in May. This meant that the country lost about 3, 710.8mw due to gas, line and frequency constraints, which is the equivalent of N1.870b, according to the Nigerian Electricity Supply Industry (NESI).

On this same day, the country’s national peak demand was 19,100mw with installed capacity of 11,165.40mw, but only 7,139.60mw was available due to inadequate gas, as well as, transmission, and other issues, which have not been resolved over the years.

President, Nigerians for Super Energy, Joseph Bassey Inyang, said that the current generation capacity was not capable of meeting the electricity demand in the country. “A few years ago, we were about a 100 million and the population has increased to about 180 million. There may be increase in generation, but there has not been increase in the electricity supply to households. This is because the amount of power the country is generating is not enough to overcome the increasing electricity demand on a daily basis. People are still running their businesses with power generating sets. Two weeks ago, residents of Lekki axis in Lagos, had a meeting with EKDC because the community has been without electricity in the last three months.”

He stressed the need for the Federal Government to encourage the use of solar energy. “But the issue with this is that, the Federal Government is now charging tariff on Solar Power,” he said.

Also, National Secretary, Electricity Consumers’ Rights Enlightenment Organisation of Nigeria, Akinbodunse Shedrack, said existing infrastructure is not capable of taking the power generated from the source to consumers.

He said that excessive billings have made it impossible for consumers to enjoy what he described as the “insignificant” rise in power generation. “We had a meeting recently with the management of Ibadan Electricity Distribution Company over excessive billing. The DISCOs are cheating consumers and this is not good at all for power supply.”

He stressed the need for the Federal Government to embrace decentralised form of power generation, saying, “This present system whereby power is transmitted from one state to the other should be discouraged.”

Consumers’ Protection Agencies React
The Director-General of the Council, Consumer Protection Council (CPC), Babatunde Irukera, said that DISCOs must stop further arbitrary billing and illegal disconnection of electricity consumers.

According to him: “The key complaints that we receive are arbitrary, unsupported and unreasonable billing; people not being treated with dignity, the complaint resolution process is either lacking or unclear and there’s really no respect for people.”

He noted: “Discos have got to a point where no one takes their bills seriously anymore because they are considered outrageous. I think the pressure on metering will not be so bad if the estimated billing was more transparent and reasonable.

“What DISCOs are doing is connecting their balance sheets to receivables from consumers, but consumers are connecting what they owe to what they receive. You see, people are complaining about supply because they, as individuals, have been responsible, but the DISCO have painted them with a broad stroke and disconnected even the responsible ones. As a lawyer, our approach to criminal work, even legal work, has always been that let the guilty man go free instead of punishing an innocent man.

“For me, there’s something fundamentally, absolutely irreparable and inexcusably wrong with penalising people because of the conduct of others. It is just not excusable. Government should never do that to its people. But if government does it as a state actor, as inexcusable as it is, it might even be permissible. But one person who has absolutely no right and should never have the prerogative to do it is a private citizen to another private citizen. And that is what DISCOs do,” he added.

For President/Founder Consumer Advocacy Foundation of Nigeria, Sola Salako, “We don’t think the power sector sees us as important. The greatest challenge to the power sector is that consumers feel disconnected. It is not very true that the Nigerian consumers do not want to pay for services,” she added.

“The problem is that when consumers don’t know the reason why they should be paying for power, which they didn’t consume, they won’t cooperate with the DISCOs. They may be unconcerned if the DISCOs are telling them how much they are losing because they are not interested, as they feel they are being overcharged.

“But if they explain to them that this is what happened. We give crazy bills because people are bypassing metres and are not paying, they will help the DISCOs fish them out. Most importantly, we have to bridge that deficit of trust, as soon as we can. After this, we can work as partners because we don’t want the sector to collapse.”

Way Forward
One of the reasons given by the distribution companies about their inability to provide meter is the issue of non-existence of cost reflective tariff.

But the Head of Procurement NBET, Eugene Edeoga said that the tariff system was enough for business to break even, insisting that what most electricity consumers are paying was far higher than what they ought to pay if they were metered.

Edeoga stated: “The problem of power sector is not cost reflective, but a whole lot of other issues. There is no study that has shown that the current tariff being paid by consumers are not cost reflective. Right now, half of the population of electricity consumers are not metered; they are placed on estimated billings and some of these consumers are paying far higher than what they consume.”

He said that if the DISCOs succeed in their demand, there is the likelihood that there will be more consumers who will indulge in bypass metres than now, thereby causing decline in revenue generation for companies.

The National Secretary, Electricity Consumers Rights Enlightenment Organisation of Nigeria, Akinbodunse Bamise, called for the provision of pre-paid meters to consumers, saying, “If meters are made available, accessible and affordable like GSM handsets without administrative bottlenecks by the DISCOs, the issue of over-billing will be a thing of the past.”

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