Nigeria: The Challenges of Having the Wrong People Managing The Power Sector

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“Fashola lambasts power firms for sabotaging economy.”

“You’re telling lies, power distributors reply Fashola.”

“Ask Discos to recapitalise, Federal Government tells NERC.”

“End estimated billing; enforce metering, Federal Government orders NERC.”

“Consumers vow to resist disconnection by Discos.”

“Consumers owe Discos N1.3trn.”

All these headlines point to a sick power sector.  Nigeria, with a population of 198 million people generates less than 5500MW and distributes less than 4000MW on most days.

South Africa with less than a quarter of our population generates over 45,000MW. Iceland with a population of less than one million generates and distributes almost as much power as Nigeria does at the moment.

The Buhari administration inherited a power generating system which had the capacity for about 5000MW, but which delivered only about 3500MW to consumers.

Some of Buhari’s spokespersons attempted to pass over the lie that they met only 2500MW on May 29, 2015. It does not help the government’s case to release false news as Lai Mohammed had been admonishing others.

One of the factors militating against Nigeria’s progress in the power sector is lying – deliberately or inadvertently – by all the stakeholders.

Stakeholders in this case include the Federal Government, the Power generating units, the Distribution Companies (Discos), the Nigerian Electricity Regulatory Commission (NERC) and the consumers.

None tells the truth and the whole truth at all times, and that explains why the problems experienced here are absent even in “Banana Republics.”

For a start, it is a fact that even if all the producing units operate at full capacity Nigerians will still not be guaranteed uninterrupted power supply 24/7. That is an annoying fact which governments refuse to acknowledge, but which create conflicts between consumers and Discos. Long hours, or even days and weeks, without power supplies to customers invariably result in resistance to estimated bills when they eventually arrive.

Second, previous administrations, as well as this one, have allowed a situation to exist which has brought us close to a Mexican stand-off – in which consumers are ready to battle Discos over estimated billing and Discos are threatening mass disconnection in retaliation for refusal to pay the bills.

All these controversies could have been averted if only all the governments have established a policy that made it mandatory for power suppliers – from ECN to PHCN to Discos – to procure a minimum quantity of metres every year as part of their operations.

In fact, it should have been the responsibility of power providers to consumers to conduct regular census of buildings needing metres – new or replacements – and to make them available. After all, they, like fuel filling stations, are selling a product which can be measured before the buyer is asked to pay. Where is such a policy?

The Federal Government deserved the blame for that – long before Discos came into the picture.

The arrival of Discos made metering more urgent because the supplier was no longer government which could not be sued for not fulfilling the normal obligations of any marketer.

Discos, being private enterprises cannot expect to get away with the impunity government enjoyed. There should have been an agreement between Discos and the Federal Government regarding the supply of metres to all consumers before the transfer of ownership – even if it is a multiple-years’ programme which should be faithfully executed. Had such a programme been put in place, every Disco would have been committed to procuring so many metres per annum such that at a certain point in time there would be no consumer without a functioning metre.

Unfortunately, unthinking Federal Government officials and Disco investors could not foresee the problems that would result from failing to take that step. That has created room for millions of consumers, not all honest people, to take shelter under estimated billing to refuse to pay the Discos and to instead negotiate with corrupt Disco staff to consume more power than they pay for.

The N1.3trn owed to Discos by consumers – including the Armed Forces, the Police and the MDAs – mostly represent the fact that we have wrong people in charge of critical functions – like the NERC.

The instructions by the FG to NERC on recapitalisation, estimated billing and metering reflect another fact. The NERC is more sympathetic to Discos than it is to consumers. It is not an unbiased umpire. Otherwise, the instructions should not have been necessary.

NERC is indeed the organ which should have negotiated with the Discos, and impose if need be, the number of metres each Disco must procure annually until every consumer is metred. But, the NERC is a toothless bulldog and its managers are probably compromised. If Nigeria had a purposeful NERC, what we should have by now is a sharp and steady decline in the number of consumers still experiencing estimated billing. The FG would not need to get involved anymore.

Finally, there must be something seriously wrong with the power sector when Discos call the Minister of Power a liar and provide “evidence” to back it up. This cannot any way help the power sector or Nigeria.

SOURCE: INDEPENDENT

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