Two years after, electricity consumers fret, investors groan

Embedded-PowerBarely two years after the privatisation of the power sector, electricity consumers across the country appeared to be impatient about the ‘sluggish growth’, as they continued to clamour for sustainable stability in power supply.

Consumers in Abeokuta, Sango, Ota, Ikotun, Oshodi, Surulere, Mushin, Ojo, Ikorodu, Agege, Ijaiye among others complained bitterly about poor-performance of the Discos in terms of electricity supply and the high tariff.

Indeed, some electricity consumers recently threatened to shun any attempts by the company or the Nigerian Electricity Regulatory Commission (NERC) to justify any increase in tariff.

Despite the several and divergent complaints raging from estimated billings, to poor transformer status and prepaid metering installation among others, the consumers have confirmed that electricity supply has relatively improved in the last few months.
As the consumers enjoined the industry watchdog, NERC to rescue them from the anomalies of the power firms, the investors, particularly the Distribution Companies (DISCOs) are embittered by the prevailing tariff structure in the country.

Some top executive officers of the DISCOs however confirmed to The Guardian that the companies have been operating a deficit account since the takeover of the assets on November 1, 2013. Besides, the commercial banks appeared to be exercising caution in extending financial support to the investors considering the huge debt profile incurred since privatisation.

The Managing Director, Eko Electricity Distribution Company (EKEDC), Oladele Amoda, said the new investors have invested massively in network upgrade, having inherited extremely dilapidated network and about 50 per cent non-metered customers from the defunct Power Holding Company of Nigeria (PHCN).

Amoda said: “These were just few of the legacy problems carried over from the defunct PHCN to the new company. The major challenge for us immediately after takeover was how to revamp and upgrade so as to position it for easy evacuation of power to all customers.
“In the past two years, we have faced this challenge headlong. So far, many new 11kv and 33kv feeders have been constructed even as re-stringing and re-intensification of many other existing lines have also been carried out. We are also deploying modern technological system such as SCADA, GIS into our distribution network to make fault detection and clearing less cumbersome,” he said.

According to him, the efforts may not have become instant turn-around because the rot of several decades will be hard to undo in just two years. He however assured: “Our rehabilitation effort is ongoing and we are confident that very soon, the impact of all these giant steps will start crystallising for all to feel and see. Several transformers are being injected into the system, and lines are being rehabilitated and upgraded,”

Amoda confirmed that funding challenge has been hampering growth and expansion plans by the company, saying: “In fact, it is like we are floating on the water now. We cannot even meet the payment now. What we collect from the customers is not enough to sustain the running cost, not to talk about meeting the debt profile. This was due to the non-cost reflective tariff in the system,”

The Managing Director, Ikeja Electric (IE), Abiodun Ajifowobaje, who corroborated Amoda on the financial challenges, said all the Discos were running at a loss. Although, he said the Discos faced tough times in their quest to change the ideology of the workers and revive the comatose electricity equipment inherited from PHCN, Ajifowobaje disclosed that the company was determined to inject new advanced technology to meter its customers and monitor its facilities.

According to him, IE is now working on two mechanisms –Advanced Metering Infrastructure (AMI) and the Customer Enumeration, Technical Audit and Asset Mapping (CETAM) to bring ultimate transformation to its network.

A recent result released by NOIPolls Limited for the third quarter of 2015 revealed that in third quarter 2015, a higher proportion of Nigerian households (70 per cent) received above four hours of cumulative power supply with an average of 9.7 hours in (July-September 2015).

This figure, according to the report represents an all-time high record of average daily cumulative hours of power supply received by Nigerians since the privatization of the power sector. This therefore depicts an improvement in power supply to Nigerian households, even as a considerable proportion of households (13 per cent) confirmed they received between 19-24 hours of power supply.

Many Nigerians see the relative improvement as part of the manifestation of the change mantra, though President Muhammadu Buhari was yet to make any policy statement on the way forward for the sector.

Although, the operators linked the improvement to regular flow of gas to the thermal plants, as a result of reduced vandalism cases, others believed that the fear of the unknown may have gripped the operators and compelled them to act in accordance with best practices.

A power sector expert, Idowu Oyebanjo, believed that the peak generation achieved recently was in response to the ‘Buhari body language’. Oyebanjo therefore tasked the Federal Government to engage the power systems engineers in the reforms process and challenged the NERC on modalities of determining a ‘cost reflective tariff’, adding that these were some of the fundamentals of power systems that only those who have studied power systems with demonstrable experience can handle.

He alleged that the consultants employed by NERC lack the capacity to do the job. “The DISCOs or GENCOs advocating for these price increases have not done it either. Can we the public request that NERC publish the analysis used to determine the so called ‘cost reflective tariffs?’
“The power sector needs Nigerians who studied power systems, and who work in economies where uninterrupted power supply is the norm, to mediate the correct transition to privatised electricity utility. Although I maintained this position seven years ago, the position is still valid because you cannot apply the Quota System syndrome to the generation, transmission, and distribution of electricity. It will fail! There is need to start again or at best, re-jig the status quo of the reform in a way the losses to the nation can be minimised,” he said.

Meanwhile, the NERC is at the verge of reviewing the electricity tariff through a consultative model expected to be done by the Discos. Having gathered the proposed tariff structures from the 11 Discos, the industry regulatory agency is expected to announce the new tariff rate soon.

The proposed review according to NERC would be between 21 per cent and 49.4 per cent. For commercial consumers, the tariff hike is by 21 percent, while residential consumers will pay 49.9 per cent more.

The proposed tariff showed an increase of about 48 per cent for Abuja Disco; Benin, 61 per cent; Enugu, 60 per cent; Jos, 63 per cent; Ibadan, 56 per cent; Ikeja, 32 per cent; Kano, 46 per cent; Port Harcourt, 40 per cent; and Yola, 83 per cent.

The commercial consumers, in Enugu are to pay 56.53 per cent increase in the commercial tariff category; Jos, 30.01 per cent; Ibadan, 18.64 per cent; Ikeja, 25.02 per cent; Kano 46.93 per cent; Port Harcourt, 10.99 per cent; Yola, 43.16 per cent; and five percent increase for consumers under Eko Disco distribution area.

Babatunde-FasholaBut the Trade Union Congress of Nigeria (TUC) has described the move as an invitation to anarchy. It warned that organised labour would resist the move as it was totally oppressive, indefensible and retrogressive. The President, Bobboi Bala Kaigama, and the Secretary General, Musa Lawal‎, in a statement, said the present proposal to increase the tariff by an average of 49.4 percent was wrong and lacked human face.
“There is no gainsaying the fact that the present billing system is crazy, and any increase in tariff at this time is bound to make it even crazier”, it stated.

Why should the masses be at the receiving end of every wrong and retrogressive policy in the country? Why must they always pay for what the rich consume more of? What sense does it make for a man who earns less than N20,000 per month to be made to pay over N8,000 for electricity bill alone within the same month? Why should they pay so much for what they do not use regularly enough, with officers of the distribution companies rarely bothering to read the analogue metres? Why should these questionable issues that are spared no thought in other climes always take centre stage in Nigeria? Surely Nigerians deserve a much better deal,” Labour noted.

The Chief Executive Officer, Benin Electricity Distribution Company, (BEDC) Funke Osibodu, stressed the need for tariff review, canvassing that it would enhance service delivery to customers. She said that it was imperative for BEDC to sanitize the business and commence new operations with notable improvement in their services to their customers in the four states of the federation, which she hinted would manifest fully in 2017.

The CEO said: “We will begin transformation and grow BEDC to ensure provision of additional power from other sources outside the national grid. We expect to feel the impact of this from 2017 when these new generation would have taken root.”

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  • emmanuel kalu

    The whole problem lies in the discos not metering their customers. which means they don’t get accurate billing, energy is stolen, and not everyone is paying the right amount. There would never be improvement until we get an effective regulators, that mandate that all customers be immediately metered. how can you demand more money from customers that are not being provided the services.

  • amador kester

    News has it that there is a sacred cow disco in south east or so where no one ever talks of prepaid meters and no regulator ever asks why?