- The experience of Nigerians five years after the privatisation of electric power in the country has not been a sweet one
- This is as nine of the eleven power Distribution companies (Discos) are yet to supply meters to their customers
- The development, according to the Nigerian Electricity Regulatory Commission (NERC), means that out of the 8,135,730 registered electricity customers, only 3,434,003 (about 42 %) had been metered
Electricity consumers in Nigeria have continued to voice their displeasure and disappointment over the fact that nine of the 11 power Distribution companies (Discos) in the country have not supplied meters to over half of their customers.
The total power generation capacity has been around 3,000 megawatts recently on the back of gas constraints, transmission line and distribution network limitations and water management issues, leaving at least 3,000MW lying fallow, Punch reports.
According to a fresh new report by the Nigerian Electricity Regulatory Commission (NERC), there are clear indications that out of the 8,135,730 registered electricity customers, only 3,434,003 (about 42 %) had been metered at the end of the first quarter of 2018.
The president of NERC, Chijioke James, said: “The data is disappointing; we are moving at a snail’s pace. We have the capacity to meet up the requirement if we are conscious to do what is right.
"Looking at those who have actually applied to have meters, more than 50 per cent of those who need meters and who have applied for them are unmetered, then we cannot actually say that we are making progress.
“Not until every customer that is eligible to have a meter is actually metered, then as far as we are concerned, they (electricity distribution firms) are not doing anything. A lot of people are on estimated billing and corruption is still there.”
NERC’s first quarter 2018 report, in comparison with the last quarter of 2017 revealed that the registered customers increased by 2.37%, while the metered customers reduced by 3.9%.
The regulator attributed the increase in the number of registered customers to the ongoing enumeration by the Discos, which it said had helped them (power distributors) to register some individuals who had previously consumed electricity through illegal connection to the networks.
The commission said that metering still remains a tough challenge facing the industry. It further said that only two Discos, Benin and Port Harcourt, had metered up to 50% of their customers as of the end of the first quarter of 2018.
Moreover, the report three in every five registered electricity consumers are unmetered, with the Yola Disco having the least metering rate at 21%.
“A major initiative towards improving revenue collection in the Nigerian electricity industry is the provision of meters to all end-use consumers of electricity,” the regulator stated.
It said the Meter Asset Provider (MAP) regulations’ scheme was launched recently to enable third-party meter providers to work with the Discos in bridging the metering gap in the industry.
The MAP regulations in 2018 was introduced to eliminate estimated billing practice, attract private investments into the provision of metering services, and close the metering gap through accelerated meter rollout.
NERC stated: “Notwithstanding the growth in the registered customer population during the first quarter of 2018, the incremental meter deployment by Discos is significantly lower than the targeted quarterly metering stated in the performance agreement with the Bureau of Public Enterprises.
"Notably, with the exception of Port Harcourt and Benin Discos, none of the remaining Discos has metered half of their registered customers.
“To this end, the commission shall continue to work relentlessly with the Discos to ensure total compliance with their respective metering targets as contained in their Performance Agreement with the BPE by enforcing the Meter Asset Provider Regulations.”
In the first quarter, the power distributors received a total of 108,874 complaints from their customers and resolved a total of 72,846, representing 67% of the complaints received, according to the report.
NERC pointed out that customer complaints were typically on metering, estimated billing and service interruption, among others.
The regulator said: “Metering and billing dominated the customer complaints, both accounting for 64,197 (i.e. 59 per cent) of the total complaints in the first quarter of 2018.”
It said out of the N171.1bn billed customers in the first quarter, only N106.6bn was recovered, representing 62.3% collection efficiency.
The regulator said: “Overall, the Discos’ collection efficiency remains abysmally poor, as just a little above the half of the revenue billed is recovered as at when due. The poor collection efficiency by the Discos has negatively impacted on the financial liquidity of the industry, which in turn, has led to reduced investment in the Nigerian Electricity Supply Industry.”
NERC noted that a major factor contributing to low collection efficiency “is customers’ dissatisfaction with estimated billing, which often resulted in unwillingness to pay.”
James said that some customers paid for meters but that the Discos had yet to supply to them. He further said: “If we are in a country where consumers’ rights are adequately protected, all the major distribution companies in Nigeria would have gone under by now with litigation. They don’t have any right not to meter all the consumers.
“Now, it is worse off for them that the consumers took the responsibility upon themselves to get metered; many of them paid and for the past one year, they have not been metered, and there are no sanctions. If we open a class action against the distribution companies, all of them will fold up. I am talking to my team of lawyers and we are beginning to look at it.”
Azu Obiaya, the chief executive officer, Association of Nigerian Electricity Distributors (ANED) an umbrella body for the Discos, said that the lack of cost-reflective tariff was preventing the power investors’ ability to invest in the sector.
Obiaya said: “Sooner is better than later in terms of resolution of this tariff gap. The generation companies right now are only being supported by the prepayment assurance guarantee, which is supposed to end through the end of this year.
"Without that buffer, we are back to a much more challenging situation in which the Discos are unable to remit the kind of money that is necessary to make the market whole, because again the tariff gap exists.
“There is an urgent need for us to put our heads together in the sector and come up with a solution to this market shortfall situation.”
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According to NERC, the Discos were issued a total invoice of N163.1bn for energy received from Nigerian Bulk Electricity Trading Plc and for the services provided by the market operator in the first quarter of this year, only N51.2bn of the invoice was settled, creating a total deficit of N112bn.
NERC stated: “Financial illiquidity remains the most significant challenge affecting the industry’s sustainability. This serious liquidity challenge is partly attributed to non-cost-reflective tariffs and high technical and commercial losses aggravated by consumers’ apathy to payment arising from estimated billing and poor quality of supply in most load centres.”
The commission said while the low remittance by Discos to the NBET and the MOs was partly due to the low collection and existing tariff shortfall, it was observed that the Discos seemed to have capped their monthly remittances, thereby keeping more than their fair share from the market funds.
Meanwhile, Legit.ng reported that Nigeria’s power, works and housing minister, Babatunde Fashola had reassured the people of the country that they would experience steady power supply just as he explained that the federal government was making efforts in that direction.
Fashola reportedly spoke at the 25th monthly power sector meeting on Monday, March 12, in Uyo, Akwa Ibom state.
Nigerian Electricity Crisis Explained | Legit.ng TV