Akinpelu: We need to come clean on generation, transmission capacities

Technical Specialist, Association of Nigerian Electricity Distributors (ANED), Mr. Akin Akinpelu, in this interview with ROSELINE OKERE, Assistant Editor, Energy and Solid Minerals, blamed the controversial metering gap on neglect of the power sector by the Federal Government. He added that the provision of metres would effectively bring to an end, the vexed estimated billings.

• Provision Of Pre-paid Metres Solution To Crazy Bills, Under-billing
• Complaints About Over-estimated Bill Becoming Overwhelming.

It appears getting electricity across to consumers is now a big issue as the Transmission Company of Nigeria (TCN) claims over 3, 000mw is now stranded because Discos are rejecting it. What is really the situation?
WE do not want to start brandishing figures and we do not want to be tackling anybody based on what they are saying. The truth of the matter is that we are taking an average of what has been delivered to all Discos across the country and that is about 4, 000mw. That is the average that we take. So, I don’t know where that 7, 000 megawatt is, I don’t know where they got it from. If the Gencos have the capacity to produce 7, 000mw and they are not able to generate, the blame should not be on the Discos, it should either be on gas or water constraints. And if the TCN is not able to wheel this electricity to us (Discos), we cannot distribute it. The TCN is still owned by the government, and even the minister recently commissioned some transmission stations in Kaduna. All these show that they are just building their capacity and many of these things are not even stable because they need to be energised to run over a period, and these Discos do not have powers over these transformer, they are assets are owned by TCN.

So, I wonder why Gencos would be saying that they have the capacity, but Discos are not living up to expectations and all that. The last stress test that TCN did on all the capacities around shows that the Discos can successfully distribute about 4, 600mw, but have they been supplied that 4, 600mw? The answer is no. Everybody in this sector knows this figure and that is why you see that the TCN is even accusing the Gencos of lying about its capacity. So, we need to look closely at these issues; we really need to confirm the available capacity of the generator, and the ability of the transmission.

Why do we have system collapses? A few weeks ago they had a system collapse. In January alone, we had about seven or eight system collapses. All these show that the grid cannot take what generation is pushing into it, so that is why it is collapsing. Having said that, we need to take a clean, clear look at the amount of energy that is being sent out because if you tell me that you have the capacity, but you cannot give me the energy, it simply means that the capacity is not available. We should note that actual capacity is different from available capacity.

Let me state clearly that it is what is successfully evacuated from the generating companies to the distribution companies that we can distribute. As at now, there is no amount of energy that is delivered to the Discos that we cannot take, so there is no point in the TCN alleging that Discos are rejecting load.

Why should Discos prefer taking energy to high profile customers thereby neglecting low profile customers?
If you have a place that you can sell your goods for N1, 000 and you are paid that amount, and another where you send the same goods to for N20 and you end up collecting N1, which would you settle for? This is a business and no longer a social service. So, what are you going to do? Any community that is showing they can pay for what we are giving them, we give them supply and collect our money. The Nigeria Bulk Electricity Trading (NBET) Plc is giving us invoice everyday and it is charging the Discos interest on what they own. We cannot push interest to the consumers. So, you see the imbalance in this system. Yes, we want to give everybody power, but we want to give power to people who can pay, and that is the truth.
The Minister of Power recently declared the Eligible Customer Regulation. How will this new policy affect your members’ businesses?

Basically eligible customers are high-end users of electricity because what the regulation says is that anyone that can use about two megawatts per month can be an eligible customer. If you a have cluster that uses up to two megawatts monthly, that cluster can apply to become eligible customers. What it means is that those are the people that are cross-subsiding the tariff in the 90. So, if you take out those eligible customers, revenues to the Discos would be affected because it is like the government is cheery picking, and you are now leaving the rest to the Discos. The collection efficiency of the people that can be eligible customers is 98 per cent. So, if you remove the 98 per cent that is so sure for their collection, it is going to affect the overall revenue.

Now that government has already initiated and started implementing the policy, what are the Discos doing to mitigate the impact or to get the government to have a rethink?
The Discos are feeling so bad at the moment and they are trying to re-strategise. The highest collection of Discos, or average collection of Discos is about 43 per cent. So, if you now remove the 98 per cent that is certain based on their supply and all that, it is like you are encroaching on the profit of the Discos. Discos are now looking inwards to see how they can carry out their businesses in the most profitable way.

The issue of estimated electricity bill is becoming highly scandalous. Is there a justification for the crazy bill that consumers are being saddled with by distribution companies?
Estimated billing is supposed to be a temporary thing, which must come to an end once a consumer has taken delivery of a pre-paid metre. But, there is a Nigeria Electricity Regulatory Commission (NERC) estimated billing methodology, which is used to estimate the bill for a period of time, and because it is called estimated bill, it is not a perfect system; there can be errors, and I will not deny that or shy away from it. But the truth is, we are cleaning up this system because the complaints are becoming overwhelming.

As much as we have overestimated bills, we also have under billing because you see that there are people that are paying N2, 000, N3, 000, but immediately they get the pre-paid metre, the rate of their consumption goes up and they begin to pay more. So, what that teaches people is that you need to manage or conserve energy. We know on our side that we are cheated, and when it is over estimated, the customer feels cheated, but when a metre is in place, everybody will be happy. That is why we are pushing against energy theft because we know that even when we have metres, so many people still bypass the device, and we have caught many people that we know are using more energy than they are paying for. So, if we are able to get a law that can criminalise energy theft, we will be happy.

The metering gap in the country is so huge. Is it possible to meter everyone?
Metre is like the sim card of the power sector, but the problem is the gap was there at the point of take-over. The investors that took over the companies did not create this gap, but the gap was created due to many years of negligence of the Nigeria Electricity Power Authority Bill, to even the Power Holding Company of Nigeria and all that. The sum of N305b was approved as the allowable carpet that can be captured or recovered from the tariff. When we did a kind of random estimate of about 4.1 million consumers that needed meters- let’s say an average of a three-phase meter, which is about N73, 000, over four million of this would cost about N299b. If you take N299b alone for metres, how are we going to buy transformers? How are we going to improve the network or buy cables?

So, you find out that the financial implication is huge, and people are not happy with the supply because we are not generating more; people are not happy with the number of hours that they enjoy electricity, and that is why they are not paying, and when consumers are not paying, it is going to hamper the entire process because we are not getting what we are supposed to get. So, we can’t invest or put this money back in the businesses. That is the challenge. The government realised that it was not the fault of the Discos that is why it came up with the regulation to close the metering gap.

Are you saying that all that Discos need to close the metering gap is N266b. Is it the Metre Assets Provider (MAP) that will make the fund available or the Discos?
No, all we are saying is that this is what it would cost to get metres, and that Discos are incapacitated in closing this gap. We have an allowable carpet expenditure of N305b over five years; any amount that is spent over this cannot be recovered because nobody wants to make such investments. But because it is a continuous thing, there is nowhere you can see four million metres on the shelf. So, it is going to be a gradual thing that would be done over a period of time, and we also believe that it is a matter of time before MAP can take care of the roll out and installation of the metres.