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That huge fine on Ikeja DISCO

By Solomon Uwaifo
22 October 2015   |   3:34 am
WHEN I read news of the horrendous fine of nearly N132 million imposed on our DISCO, my heart sank. Obviously, that was a huge setback for a company that has struggled to come to grips with reworking a rickety distribution system on most streets of the capital of Lagos State. How long after that do we wait for scorched, drooping conductors to be replaced in Ikeja?
Power terminal

Power terminal

WHEN I read news of the horrendous fine of nearly N132 million imposed on our DISCO, my heart sank. Obviously, that was a huge setback for a company that has struggled to come to grips with reworking a rickety distribution system on most streets of the capital of Lagos State. How long after that do we wait for scorched, drooping conductors to be replaced in Ikeja?

NERC has pronounced Ikeja Electricity Distribution Company (IEDC), guilty. What I imagine is that the fine and the size of it, are results of IEDC’s presumed guilt and NERC’s belief in the capability of the DISCO to pay the fine. That is where my doubts begin.

Ordinarily, the mounting method keeps wires safe from dropping to the ground in secondary distribution. However, the wires lose that safety, if they snap along their lengths between two poles and that can happen if they are subjected to mechanical forces strong enough to make them snap, after many years of working, scorched by electric loads.

How about service drops from secondary distribution wires? Those drops are done at pole positions to support the service wires. Whether we talk about drooping conductors or weak or loose joints or connections, we deal with mechanical issues. The law provides that the bottom conductor in secondary distribution installations, shall not be lower than about six metres. The one in front of my house, is about three metres from the natural ground. At the lowest point, it is probably about 2.7 metres. There was a day someone at the back of a truck lifted an insulated service wire for the truck to pass through. I am not sure that he knew what he was doing; these are very unsafe heights to have electricity services.

What is the aim of NERC in imposing N250 per minute? The answer should be found in what the regulatory body perceived as the reason for IEDC’s inaction. It cannot be to play power, for every DISCO knows that NERC is the regulator and the power behind the industry. I suspect that it is to correct IEDC. If I am right, I want to point out that the regulated industry is very young indeed. Therefore, every part of it is trying to find its feet. I suggest that correction should aim at settling the industry. It should not unsettle any part of it. NERC should please consider N25 per minute and N100 per minute for as long as it takes IEDC to comply as NERC had set out in its decision.

Replacing scorched wires is all that IEDC can and should do in the interim, until it can reengineer the sick distribution system. That should stop frequent outages and improve sales. Ikeja electricity distribution is derelict for the most part. Wires have drooped in Maryland Crescent, as in other parts of Ikeja, some for more than two decades. In Maryland Crescent, we have waited long for replacement of those wires.

Some 18 years ago, residents of 6, Maryland Crescent could not come out of their compound for three days. Two poles had collapsed and brought the wires down, across their gate. They were hemmed in. It took three days for the monolith to intervene and a slapdash intervention it was. It put pieces of wires together and bound them, with a promise of whole replacement, “when materials are available.” We are still waiting. The monolith is dead. IEDC the successor stumbles around. Now, it is fined when it has jobs in dire need of execution!

The Ministry of Mines and Power, later the Ministry of Power and Steel and later still, the Ministry of Power, provided the oversight function at the time of the monoliths; but it was weak, almost useless. NERC has provided no oversight that I know about. That laxity was probably, why NEMSA had to be created, but an effective and smooth oversight function that would lift the industry, should be done by a department of NERC. No external body can do it. I am sure that government will scrap NEMSA as part of its programme for change. DISCOs must not be left to their own devices? There is time to stop the rot, but it is getting dangerously late.

How many Nigerians have died from drooping wires unreported? How much money have consumers of electricity in Nigeria spent buying standby generators and their spare parts? How much more money have they spent replacing damaged household appliances and other electrical equipment?

Imposing a giant fine on IEDC means that Ikeja electricity consumers have receded hopes of early relief. NERC must think through every action that it takes. Many a Nigerian businessman would buy Rolls Royce, when they can barely afford a Volkswagen Beetle. I expect some DISCOs to do funny things with monies collected from consumers, while outrageous Power Purchase Agreements hang around their necks. They are as they are, they are not rich.

Where there is an electric utility, it is inevitable that there will be an assortment of customers. Therefore, DISCOs will be expected to collect huge sums of money every month. But much of that money will go back into crevices in the industry. It is the most capital intensive of all industries known to man.

DISCOs will not make money until they reengineer their franchised distribution systems and the FGN/NERC does something about monstrous Power Purchase Agreements (PPAs). In my opinion, the vaunted tariff review will find money to pay the PPAs as well as pay for gas, our wrongly preferred fuel for power generation. Nigeria’s electricity tariff and rate structures might be acceptable for developed societies whose per capita consumption has moved high up the saturation curve, but it is a disincentive for Nigerians at the bottom of that curve. It is designed to slow down everything, including industrialisation.

• Uwaifo FNSE is former Area Manager, ECN Kaduna (1971 – 1973)

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