The Nigerian electricity industry seems trapped in a vicious cycle. For decades, the sector has grappled with the same challenges, with operators and consumers repeatedly complaining about the same thing.
First, the industry is not generating enough power. The transmission and distribution systems are extremely weak, with distribution firms more focused on revenue collection than showing serious interest in reinforcing the system to ensure a stable supply of electricity to customers.
The Transmission Company of Nigeria is still government-owned and struggles with inadequate capacity and aged equipment. Most grid collapse cases happen because of faults in the transmission facilities and vandalism.
The distribution subsector is faring worse with inadequate injection and distribution capacities. The huge debts accumulated by the distribution companies are preventing them from making necessary new investments in the business.
The 11 DisCos are mostly in bad shape, unable to guarantee regular electricity, and unable to meter about half of their customers. Thus, 5.9 million customers out of a total of 13 million customers are metered. This means that most customers do not have meters and are placed on estimated billing, which is often done arbitrarily and quite unfair to customers.
It is strange that the Federal Government, not the DisCos bothers more about providing meters to customers.
Meanwhile, the Federal Government is expected to begin distributing meters to consumers by the first quarter of 2025 under the Presidential Metering Initiative.
Through the PMI, the Federal Government aims to close the metering gap and end estimated billing by providing 10 million meters in five years.
The inability of the DisCos to raise financing in the form of debt or additional equity was identified as the major constraint in the acquisition and deployment of end-use meters and other capital investments.
The Nigeria Electricity Regulatory Commission had in June 2024 initiated a move to meter all customers under the Band A feeders in the country through the Meter Acquisition Fund.
DisCos received N21 billion from the MAF scheme to procure and install meters during this period.
The introduction of the MAF followed the failures of previous programmes and strategies, including the Meter Asset Provider Regulations in 2018 and the National Mass Metering Regulations in 2021. They were introduced to address metering challenges.
In March, the Minister of Power, Adegoke Adelabu, said the focus would be on all the DisCos to compel them to achieve expected performance, while “wilful non-performance by any DisCo could suffice as a reason for severe punishment or outright licence revocation.”
However, between then and now, nothing has indicated an improved performance by any of the DisCos and the minister looks unable to wield the big stick against any errant DisCo to set an example.
It is a no-brainer that metering all customers is an essential part of the power supply equation because a metered customer gets measurable value for his or her money while the utility company gets paid for the energy supplied.
NERC should set a timeline during which the DisCos must meter all their customers. The Federal Government’s plan of metering all customers in five years is too far.
Customers deserve a good deal and the actual amount of electricity bought at every point in time must be properly measured.
All hands must be on deck to improve the power supply.
The Federal Government, states and the private sector need to work together to move the power sector forward.
The New Electricity Act should be utilised by the states to drive improvement in power supply nationwide in conjunction with the private sector.
Nigeria needs to grow its power sector to the extent that it will enable the country to become an economic powerhouse.
