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Electricity Consumers and the Energy Sector in Nigeria

By - - [ Energy ]

Electricity Consumers Demand Collaboration Amongst Operators in the Power Sector— Labiran A. A.

In the comity of nations, Nigeria has been experiencing and still experiences epileptic power supply. The inabilities by agents of the federal government to have a better grasp with issues and developments in the sector have been very embarrassing hence nobody wants to discuss power outages any more.

Some Nigerians who had been in the Diaspora over the years would like to return home and contribute to lifting up the head of Nigeria politically, socially and economically. However, each time they think of unexplainable power failure, they resort and very reluctantly too to postpone a return to their fatherland to a later date.

Industries had tales of woes to tell about unavailable power supply and avoidable investments in powering generators. Nigerians were described few years ago as “happiest people on Earth” because of their dispositions to darkness in place of light and a slowdown of economic activities for days, weeks, months and years in some communities’ due to lack of power to do business and operate basic amenities.

According to the survey, Nigerians believe “all will be well” no matter how bad dispensation of a service may seem and hence the appellation as the “Happiest people on Earth”.

Consequent upon lack of capacity to resolve anomalies in the Power sector, manufacturing companies shut down their Nigerian operations and relocated to a saner economy where they meant business with the provision of power.

Analysts lost count of those who lost their jobs as a result of shut downs, rightsizing and downsizing. Lack of dependable statistical figures would not enable researchers put an accurate figure on those who lost their lives during surgical or caesarian operations in theatres across the country.

Medical doctors on the altar of patriotism and in their bid to continually serve Nigeria in various capacities came one on one with power outages and resorted to improvise with the deployment of torch from their respective mobile phones during surgical operations.

From one regime through another and to another, the issues were not identified in the face of huge dollar denominated investments in revamping the sector; however, some privileged ones moved away from the reality with the provision of direct current or generators in their respective homes and offices.

Foreign manufacturers of generators with the collusion of a privileged few are smiling to the banks on the strength of short sightedness thinking that should solve erratic power supply to different parts of Nigeria. However, this method is not only temporary, but diversionary, and a wastage of financial resources that should have been invested in some other economically viable projects at the government, corporate or individual levels.

Former President Good luck Jonathan unbundled NEPA into Generation, Transmission and Distribution companies. This move, though an improvement on the old order where NEPA had too many job functions to cope with.

Observers are of the view that there are other issues begging for attention which principally border on lack of funds to put electricity infrastructure in place, unpaid debts and absence of collaboration amongst operators in the sector.

Babatunde Raji Fashola, immediate past Lagos State Governor and currently the Minister of Power, works and housing told those who cared to listen that he is an everyday Nigerian, a customer of a distribution company in the context of electricity consumption and he also craves for a better service.

Fashola in his official capacity demanded from some operators why they are disrespecting laid down guidelines that should ordinarily help in the attainment of maximum results in the power sector.

In Fashola’s reply to an allegation by Mr. Sunday Oduntan, an Executive Director, Research and Advocacy of the Association of Electricity Distributors (ANED), titled “My Directives on improved service delivery in the Power Sector went to Legal Entities, not an interloper”.

 Fashola directed Discos should pay N800 billion debt they owe Nigerian Bulk Electricity Traders (NBET) so she can pay Gencos. In a related development, NBET was also directed to pay N728 billion to Gencos. The difference of N72 billion which is a subject of dispute is what the Federal Government presumably owes.

In the area of infrastructure, Fashola exposed the lack of maintenance culture and queried “why 408 feeders, which have a capacity to deliver 5,756MW of power to consumers only, carry 444MW because of faulty lines, bad equipment and load shedding”

 Sunday Oduntan and Kola Balogun, Chairman, Electricity Meters Association of Nigeria (MOMAS) made an appearance on a Saturday morning breakfast show on a Lagos Television, mid. August 2018.

According to them, the Federal Govt. fixes the price of electricity per unit at the disadvantage of the Discos. Lack of the metering system according to them gives rise to underselling electricity to consumers.

They reminded viewers that the power sector is experiencing a policy summersault. There were agreements between the Discos and the Govt. at the centre that preceded the Buhari’s administration.

Lack of meters according to them is a function of financial capacity and DISCOS do not have what it takes to pay for meters.

Meters are categorized as smart and non smart. A smart meter costs N50, 000 while non smart costs N25, 000. The meter passes through a value chain of leaving the manufacturer’s factory for standardization at the office of Nigerian Electricity Management Agency (NEMSA) before the eventual hand over to the DISCO.

Mr. Oduntan revealed that the Federal Government made a provision of N1.7 billion for the provision of meters over a period of 5 years without proactively budgeting for those building houses every day. Presently, there is a shortage of well over 4.1 million meters. 40 % of theses meters according to Mr. Balogun are by passed in the first month of installation thereby leading to loss of revenue to the DISCOS.

There is a consensus that estimated billing is evil and should not continue consequent upon which Oduntan submitted that the provision of meters should henceforth be the business of National Electricity Regulatory Commission.

Balogun advised that meters are available only for those who can afford to pay cash.

With a total of 11 Discos all over the Federation, Eko Discos was the best performer at 89% with reference to payments for service provided while Kaduna recorded the worst performance at 13%.

It would also interest any observer that Nigeria exports electricity to Niger and Benin republics. Generating Companies and service providers received $159,773,116.61 with a $92,315, 986.20 still outstanding.

Stakeholders in the value chain play roles that cannot be ignored in a hurry. For instance Minister of Power, Works and Housing make appearances times and over again before the House and Senate Committees on Power in the bid to defend budgets and secure approvals for financial projections.

It is one thing to secure legislative approvals, it also another thing to receive cash backing from the Federal Ministry of Finance and the Central Bank.

In a financial year, budgets presented do not receive 100% implementation hence the need to prioritize what to spend and on which project.

Consequently, Discos should embrace the tradition of collecting cash for electricity sold to customers. NBET would like to get paid for bulk electricity sold to Discos and GenCos would like to get paid as well for electricity generated and sold to NBET.


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