In an uncharacteristically tough measure, the Nigerian Electricity Regulatory Commission issued a directive recently exempting maximum demand customers that were yet to be metered from further payment of electricity bills. Quite significantly too, the regulatory authorities forbade the electricity distribution companies from carrying out their usual threats of disconnecting such customers.
This line of action is long overdue, a marked departure from the usually placatory disposition of NERC towards the overindulged DisCos that have flouted, with impunity, every deadline to improve their services, including those they have set for themselves. NERC must have been constrained to take the latest action after the DisCos failed to honour two previous agreements of November 30, 2016 and March 1, 2017 to meter the MD customers.
NERC’s directive, which is meant to compel compliance with the policy of providing prepaid meters to electricity consumers – and at the same time discourage the resort to the arbitrariness of estimated billing – will however offer marginal relief, unless it is extended to the non-MD or residential customers. The MD customers are the commercial and industrial customers with very high consumption levels of electricity. They belong to the category defined by NERC as customers “within the threshold of 45KVA consumption and above.”
But the residential consumers are also a strong force that should not be treated with levity. Made up of over seven million customers, they bear the brunt of the fraud called estimated billing in as much the same way as the MD customers. A customer who travels out of town for six months, for instance, does not have to return to meet a bill of, say, N72,000 (at N12,000 per month), just because an incompetent, firm is bent on reaping where it did not sow. And when such a bill is not paid then such a customer is labelled a debtor who wants to consume electricity free.
Nothing could be further from the truth; customers are willing to pay but only for what they consume. When it is considered how much is spent weekly on buying petrol or diesel to power generators, then it will be easy to see why many people would prefer to pay their bills if things are done transparently. Besides, providing meters so that customers can track their electricity consumption is a right, not a privilege. It also provides a ready solution to the problem of indebtedness to the DisCos, just as is obtainable with the telecommunications service providers.
It has taken NERC too long, however, to realise that only strong-arm tactics can produce results when dealing with the DisCos. The successor companies of the unbundled units of the defunct Power Holding Company of Nigeria have employed every trick in the book to deny customers the use of prepaid meters. This paves the way for their reliance on estimated billing, a dubious system that allows them to force arbitrary bills down the throats of customers, whether services are provided or not.
More than three-and-a-half years after the discredited privatisation of the power sector, the power situation has known no improvement. This is clearly the result of a privatisation that saw the Goodluck Jonathan Administration farming out power firms to business and political associates with literally no antecedent in the field or the wherewithal to fund a critical revamp in a capital intensive sector. It was an opportunity missed to bring in experts with wealth of experience and capital, which is why the country is suffering today.
A report quoting NERC indicates that out of 7.47 million customers in the country, only 3.39 million had been provided with meters as of December 2016, which ought to be the first thing in place if the DisCos were really interested in honest and serious business. Their claims of shortage of meters in the country have been serially debunked. The Executive Secretary of the Meter Manufacturers Association of Nigeria, Muyideen Ibrahim, in a recent interview, said manufacturers had the capacity to produce 25,000 meters monthly.
Beyond the DisCos, the abysmal roles of the generation and transmission companies in the power chain should not be glossed over; they have contributed immensely to the embarrassment of estimated 180 million Nigerians struggling to function with just 4,000 megawatts of electricity. While it is often claimed that the GenCos have a capacity to generate 12,500MW, there has always been a big question mark over what the Transmission Company of Nigeria could wheel. The Minister of Power, Works and Housing, Babatunde Fashola, was quoted in January as saying, “Today, at its frugal, the nation’s power grid would support 6,500MW; pushed to its limits, it would carry 7,200MW.” Very few believe this, saying that once more than 5,000MW is loaded to the grid, it would collapse.
With the gas issue largely resolved due to reduced attacks on facilities by militants, it is expected that the power situation in the country would improve marginally. But marginal improvement is not what is needed now. The country requires a massive overhaul of the power system; Nigeria cannot continue to share 4,000MW, while a country like South Africa, with a population of 50 million, generates 40,000MW of electricity.
NERC’s recent move against the DisCos is just another attempt to mend a broken bottle; it is realistically impossible. The current players in the sector have proved in the last three years plus that they cannot solve Nigeria’s electricity problems. Even the threat of dissolving the boards of the firms cannot change the situation. What is needed is to bring in those who have the capacity in terms of capital and technical know-how to take the country to the next level.
An economy that has just gone through multiple contraction, where unemployment rate stands at 13.9 per cent (and underemployment at 19.7 per cent), where there is the need for diversification, and where manufacturing needs to be revived, cannot continue to wait for these incompetent power sector operators. Something drastic needs to happen.
