Nigeria: Playing DiSco with Nigerian Electricity Consumers

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Power Substation

Going to discos was very popular in the ’80s. But dancing to a melodic pop music was not the only thing boys knew how to do then. They also played some wooing pranks on girls, starting with such gimmicks as “excuse me dance”.   

This fun then has become a good pun today for electricity distribution companies (DisCos) and their customers in Nigeria. Energy business is a very serious one. But these DisCos have reduced it to what happens in a discotheque.    

The problem usually starts from their marketing managers. They usually get high revenue targets. To meet such targets, they send high estimated bills to customers. When you complain, they find a way to explain and justify it. In the estate where I live in Lagos, the average bill that comes to every household every month is N10,000. In some areas, it is higher.

This comes amid epileptic power supply. Recently, power generation dropped from 4,000 megawatts to 2,039MW. On April 25, 2019, there was a total shutdown of Egbin, Omotosho, Olorunsogo and Paras power stations. The Transmission Company of Nigeria (TCN) explained that the national grid experienced reduced power generation because of the emergency maintenance of the gas pipeline supplying gas to those four plants by the Nigerian Gas Company, a subsidiary of the Nigerian National Petroleum Corporation (NNPC).

In a poll released by NOIPolls last month, it was revealed that power sector experienced a decline in power supply to Nigerian households to 37 per cent in the first quarter of 2019 from 42 per cent obtained in fourth quarter of 2018. It dropped consistently from 46 per cent in January to 35 per cent in February and to 30 per cent in March 2019.

The shameful aspect of Nigeria’s power crisis is that electricity supply is said to be more stable in the countries we supply energy to. Nigeria supplies power to the Republic of Benin, Niger and Chad. But, as the managing director of the TCN, Usman Mohammed, reportedly advised, power distributors in Nigeria should visit these countries to learn. Cotonou in the Republic of Benin, for instance, is said to have straight and good distribution network and the only time there is power outage there is when there is a problem with the grid.

This is why I don’t blame residents of some communities who have had to take to the streets in protest. In January this year, Okeira Aguda Ogba community residents in Lagos staged a peaceful protest against Ikeja Electric over high estimated billing. Saying house rent was cheaper than electricity, the residents demanded prepaid meters. Residents of Jakande Estate Ejigbo in Lagos had similarly protested against Ikeja Electric last December over high estimated billing system. Ikeja Electric had failed to provide meters to the areas as reportedly ordered by the Nigeria Electricity Regulatory Commission (NERC) last year.

Ironically, the DisCos are also lamenting. Last year, 10 out of the 11 of them reportedly lost about N115 billion to energy theft. The Ikeja Distribution Company, for instance, reported that out of 134,000 prepaid meters it installed in its area of operation, 43,000 had been tampered with. Some of the DisCos have also reported similar issues of meter bypass, illegal connections, billing irregularities and unpaid bills.

There are many other challenges. The electricity generation companies (GENCOs) have not been able to maintain the installed capacity given to them. The transmission facilities need further upgrade. The distribution chain is plagued by weak transformers and lines. In my estate, we taxed ourselves to provide a new transformer which cost us over N7 million. It is currently being installed. But the painful part is that after the installation, the property will no more be ours. Ikeja Electric will take over and begin to give us outrageous monthly bills.

It is the small and medium-scale companies that I pity most in all this. Many of them now survive on generating sets, with the attendant huge costs. Some have been forced to close down.

The multinationals like Coca-Cola and Wempco generate their own power and have abandoned the national grid. What private power generation costs these companies on a monthly basis runs into billions of naira. This has led to job losses, relocation of manufacturing concerns to other countries and even outright closure.

For an average consumer, prepaid meter remains the best option. It ensures that it is what you consume that you pay for. It also controls energy waste because when you realise that putting on many electrical appliances equals higher bills, you are forced to be cautious. 

But, as in most things we do in Nigeria, the provision of prepaid meters has been anything but salutary. When it was free, the distribution companies vacillated in making it available for their customers. Now, it is N70,350 for a three-phase meter and N38,850 for a single-phase meter, inclusive of VAT.

On April 3, 2018, the Meter Asset Provider (MAP) Regulation came into force. The Meter Asset Providers are to ensure that over five million electricity customers who are affected by the metering gap get their meters. My own DisCo, Ikeja Electric, commenced MAP this May. It says customers can either pay upfront for the meter or in instalments. The instalment payment is called Monthly Metering Service Charge. As agreed with the MAPs, it will continue until full amortization of the meter asset cost. The MAP scheme is expected to meter all unmetered customers within three years.    

Let’s hope this works. And let us also hope that the other players in the power chain do their part as well. The GENCOs say they are ready to generate power that will sustain the country on a daily basis but that the challenges in the power chain must be tackled. They claim they have available capacity of 8,000MW, but the transmission and distribution arm must be ready to do their part.

We need to take a lesson or two from some African countries on tackling our energy crisis. Last week, President Emmerson Mnangagwa of Zimbabwe sacked his energy and power development minister, Joram Gumbo, for eight hours of daily power outage across the country. This is said to be the worst electricity blackouts since 2016. And it is because of a drop in output at its largest hydropower plant and ageing coal-fired generators. The hammer even came after the minister had reportedly licensed over 30 companies to provide solar power to the country. 

I do not recommend the sacking of our own Minister of Power. But the Federal Government should endeavour to separate the three ministries lumped together under one minister. Mr. Raji Fashola is the minister in charge of Power, Housing and Works. This could be too cumbersome for one man to oversee. It will likely affect speed and efficiency needed in the power sector.

Electricity providers in a country like Uganda do not joke with this issue of speed and efficiency in getting power to those who do not have access to it. Essentially, Uganda’s main electricity distribution company, Umeme Limited, and many decentralised renewable power firms, aim for an integrated approach, knowing that none of them can solve access to power problems alone.

This public-private partnership is worth emulating. It will be of great benefit to small businesses. Aside from being sustainable and reliable, renewable energy does not emit harmful toxins as it is derived from natural elements such as solar, wind and biomass. The only snag is that the cost of purchasing it is still very high. Government should put policies in place to help bring the price down.

Luckily, the European Union reportedly wants to invest €200 million in Nigeria for renewable energy. The investments include a €165 million direct loan from the EU and a €30 million from the Electrification Financing Initiative (ElectriFI). The financial institution is to target projects that provide access to electricity in rural areas. It will also support companies that offer mini-grids to local businesses in the urban areas. The hope is that this effort will help in solving part of the electricity problems households and small companies face in Nigeria.

On its part, the regulatory agency should ensure that the TCN, the GENCOs and the DisCos attain their capacities. The power distributors in particular need more investments and upgrade of their facilities.   

Electricity consumers should play their part by not tampering with meters. The moves to amend some sections of the Electric Power Reform Act, 2005, are welcome. Currently before the Senate is a bill to prohibit and prevent electricity theft. It seeks seven years’ jail term for whoever is involved in the act.

Only drastic measures like this will ensure that we do not continue to dance disco when our energy house is on fire. 

SOURCE: THE SUN

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