THE recent decision of the National Electricity Regulatory Commission to impose a fine on one of the power distribution companies is a rare attempt by the regulatory agency to deploy its powers within the extant laws to bring an errant firm into line. NERC had previously been accused of appeasing the DisCos because of its reluctance to crack down on them. It however remains to be seen if the sanction was hefty enough to discourage the firm from persisting in its wayward ways.
For its failure to comply with NERC’s order on the issuance of prepaid meters to electricity consumers, Ikeja Electricity Distribution Company was recently asked to cough up a fine of N131.4 million. NERC, in imposing the fine, explained that the company fragrantly breached its Credit Advance Payment on Metering Initiative Order, which allows willing electricity consumers to pay for prepaid meters. Once paid for, such meters are to be supplied within 45 days. The initiative, which is meant to tackle the complaint of lack of funds by the DisCos, will ensure a refund to the customers in the course of time, through rebates or reduction in fixed charges.
NERC came up with the initiative after efforts to ensure that customers were supplied with prepaid meters to enable them pay for the exact amount of power consumed were met with recalcitrance from the DisCos. The practice of denying consumers prepaid meters, common all over the country, has led to customers being coerced into paying huge sums of money arbitrarily allocated to them as bills. Where payment of such “crazy bills” is resisted, they are threatened with disconnection, sometimes leading to clashes between consumers and officials of the power firms.
NERC’s action, though a significant departure from the past, is viewed with suspicion. Many believe it may not actually produce the desired result. For firms that believe they can only break even by cheating customers and foisting estimated bills on them, it will take more than a fine to stop them. Since estimated bills are arbitrary, they allow the DisCos to come up with bills far beyond what the consumers would have paid if they were properly metered.
According to a report quoting NERC, only about 50 per cent of electricity consumers in the country are properly metered. This is a large market for plunder by the DisCos who reportedly pass the cost that cannot be defrayed by metered customers over to the unmetered ones. By so doing, they can never incur losses as whatever should have come to them as losses are shared arbitrarily among customers with no meters.
Apart from the obvious reluctance to meter consumers, the DisCos have also refused to read meters in premises where the analogue ones, a carry-over from the now defunct Power Holding Company of Nigeria, are available. This gives room for all manner of sharp practices targeted at short-changing the consumers.
Aside from the illegalities that come with estimated billing, the DisCos have also, without shame, taken up a campaign for increased tariff, which is also being resisted by consumers because there has not been a corresponding improvement in the quality of services rendered. Besides hoping to make money from increased tariff, the DisCos also deliberately twist facts to create the impression that consumers want to enjoy light, but are reluctant to pay.
Nothing could be farther from the truth. If everybody is provided with prepaid meters, the question of energy consumers refusing to pay will not arise, exactly in the same manner as the telecommunications companies are not complaining about customers refusing to pay for services.
But the real bone of contention is the fact that consumers are not being billed for exactly what they consume. That is why those swelling the rank of street protesters are actually those denied the use of prepaid meters. The issue of prepaid meters has to be addressed first before taking on that of an upward tariff review. As the former Managing Director of Ibadan Electricity Company, Fortunato Leynes, reportedly said recently, “…in an electric utility, electric meter is the cash register of the company.” For that reason, the DisCos must ensure that “each customer must be metered.”
Having opted for the option of fines, NERC should be ready to go further in the event that there is no improvement from the DisCos. It should compel them to meter consumers. There certainly should be other means of forcing recalcitrant DisCos to comply with directives. As the Senate President, Bukola Saraki, said recently, there were agreements reached with these power firms before they made the purchases. These agreements have to be kept. He said, “What we don’t want to see is the impunity where people believe they can make commitments, but not necessarily be held to those commitments, and at the end of the day, it is our own people that suffer.”
When all is said and done, it is obvious that Nigerians cannot rely on the current managers of the power sector to bring about the much-needed stability and efficiency in electricity supply. The choice must be made between propping them up and seeking an alternative. Before they emerged as the preferred bidders, there were many other competent and financially more stable power firms that showed interest, but were denied. Now that the current operators have shown their incompetence, it is time to start giving others a chance. Without doubt, it is within the ambit of reason and the law to do so.
