Contentious Loan

Joe Ajaero, General Secretary, National Union of Electricity Employees (NUEE)

By Oji Odu

The decision by Federal Government to provide N39 billion loan to power Distribution Companies (DISCOs) to provide meters for their customers has continued to generate angry reactions. Last Friday, two major electricity unions in Nigeria’s power sector expressed their opposition to the decision besides that of the proposed increment in minimum wage in selected government agencies.

The National Union of Electricity Employees (NUEE) and the Senior Staff Association of Electricity and Allied Companies (SSAEAC), disclosed this at an event organised by the Abuja Electricity Distribution Company (AEDC)for the signing of the company’s staff conditions of service between the Disco and the unions in Abuja.

The Minister of Power, Works and Housing, Babatunde Fashola, had during the recent 18th power sector stakeholders’ meeting, announced that the N39bn loan would enable power distribution companies to procure meters to reduce the huge metering gap in Nigeria and help in no small measure to resolve the crisis in the billing system.

Speaking after accepting to sign the staff conditions of service agreement with the AEDC, the General Secretary, NUEE, Joe Ajaero, asked the AEDC’s Managing Director, Ernest Mupwaya, whether it was right for the Federal Government to provide funds to power firms after selling out the companies to private investors.

Ajearo regretted the N701 billion intervention fund which government had recently provided the power Generation Companies (GENCOs), and stated that NUEE was neither in support of the N701bn intervention fund nor the move by government to provide N39bn financial support to DISCOs for meter procurement.

“If after four years of running as private companies you (power firms) are still looking for bail-out funds or loans, then I think there is a problem, because it shouldn’t be so,” he said.

In the same vein, President-General, SSAEAC, Chris Okonkwo, who also signed the AEDC staff conditions of service agreement on behalf of his group, distanced his association from governments moves, and said it would oppose the use of public funds for the support of power companies that had yet to deliver satisfactorily, four years after they were privatised.

“Labour will not accept the borrowing of N39bn by the Federal Government to DISCOs for the procurement of meters. We raised this issue at the Trade Union Congress meeting and we advice you (DISCOs) to start looking for alternatives,” he said.

Metering electricity customers has continued to be a daunting challenge to DISCOs with about 50 per cent electricity consumers yet to be metered. The result is the crazy billing system by the DISCOs which is used to continuously used to rip-off consumers.

Although the Discos have always promised to meet the metering need of their customers, they have been unable to do this. Early in the year, Eko Electricity Distribution Company (Eko Disco) promised to roll out 200,000 meters this year, but half way into the year, the company is nowhere near meeting half of what it promised. The story is not different with other Discos. Benin Disco was only able to provide 39,000 meters to its customers in 2016. The Ibadan Electricity Distribution Company (IBEDC) last year unveiled a plan to roll out 570,210 meters to its customers at the cost of N34.5billion over a five-year period. But this is like a drop in the ocean considering the need in its franchise.

Apparently to address and redress this yawning gap, the Minister of Power, Works and Housing, Babatunde Fashola, last Sunday, announced a Federal Government intervention programme that would ensure the roll out of three million meters across the country.

The intervention followed the incapacity of DISCOs to meter all the houses of consumers across the country.

Fashola, who is also the Minister of Works and Housing, told the News Agency of Nigeria (NAN) that the government had in 2003 awarded contract for the meters, but they were not supplied.

“In 2003, the government awarded a contract for three million meters, but they were not supplied. I inherited it. They were in court, and I am trying to take it out of the court so that we can settle and start the supply,’’ he said.

The former Lagos State Governor said that metering houses in the country was facing some challenges as there was no accurate database of actual consumers in the country as data shows that only about six million households are electricity consumers in the country.

“There is a database of six million households. It is a faulty base because we have more than six million households in the country. There are four types of consumers – R1 (poorest consumer), R2, R3 and maximum demand consumers — and they are not on the same plan.DISCOs need to go into these houses, do an audit to determine the type of meters to install.

“If you have a wrong meter, you will pay wrong price or bill. A meter is both a safety device and a measuring device. It can under- read or over- read or cause fire if not properly installed.But essentially, the DISCOs must provide meters. It is only fair and let the consumer manage his consumption and billing system because he has a meter,” he added.

The Minister also described the problems of Nigeria’s power sector as man-made. He  identified poor planning, way of life and human behavioural problem as some of the intractable issues. Others are power wastage, building of houses in difficult terrains without approval, lack of conservation culture and energy theft.

Fashola explained that some people put on a 70 or 120-watt bulb as security light for 24 hours, including the daytime when they do not need them,” and it is because they have either stolen the energy or bypassed their meters. They are robbing DISCOs of huge sums of money as they may not be able to pay back the energy they bought for distribution,’’ the minister said.

The Magazine’s findings reveal that electricity consumers pay N25,000 (official), N35, 000 (fast-track) for a single phase meter, while the three-phase models go for N50,000 and above. But after making down payment for the meters, they are yet to be supplied several months or years after by DISCOs which has exposed consumers to the user-unfriendly and crazy billing.

Following repeated failure of the DISCOs to, again, meter their unmetered customers at the end of the November, 2016 deadline, the Nigerian Electricity Regulatory Commission (NERC) said it will sanction DISCOs which failed to meter electricity customers in their networks before Feb. 28, 2017. NERC in a statement on its website on Wednesday said that sanctioning of the defaulting DISCOs would begin on March 1.

It stated that the envisaged sanction was sequel to the initial directives by NERC and the moratorium period given to DISCOs to meter consumers. The company that this was in line with its mandate of protecting the rights of customers had in June 2016 after consultation with the operators, directed DISCOs to conclude metering of all customers before Nov. 30, 2016.

According to NERC, the commission at the expiration of that notice granted three months moratorium which will expire Feb. 28, 2017 to enable the DISCOs effectively execute the metering deployment plan for MD customers. It stated that any electricity customer yet to be metered as at Feb. 28, 2017 should report to the commission through any of its Forum Offices in all the states of the federation. NERC urged customers that had advanced money to the DISCOs through the now wound down Credited Advance Payment for Metering Initiatives (CAPMI) to make use of the complaint redress mechanism.

“The Commission is by this notice advising electricity customers not to take laws into their hands by attacking staff of electricity distribution companies. They may wish to be guided not to resort to legal proceedings as the first option in seeking redress, but to explore the commission’s redress mechanism to save litigation cost and time.”

But the problem is still there. The affected customers are yet to be metered. Estimated and crazy billing remain the order of the day. Helpless electricity consumers are coerced to pay between N8,000 and N12,000 monthly electricity bills where they continue to spend most of each day in darkness.

In a chat with the Magazine on the loan, Chima Edu, a Businessman asked: “ On whose side is government? Why should they be giving money in whatever for to these people who boasted of their both human and financial capabilities to takeover these electricity firms during the privatisation?

“Just recently, government provided N701 billion to the GENCOs, now they want to dole out another N39 billion to DISCOs for provision of meters which they had earlier provided money to them for. This really shows who owns these companies.”

Meanwhile, industry experts do not think the decision of the government to roll out prepaid meters will put an end to the long wait of Nigerian electricity consumers for meters?

Speaking on this, Segun Ajisebutu, an energy economist, said that while the intervention is good, it is not sustainable because its continuation is a function of various factors. He added that the best thing is to emplace a system that will run on its own. He is of the opinion that reviewing the aspect of the agreement with Discos that gives them the responsibility for meter provision will help the industry. He opined that given the liquidity challenge that all the Discos face, rolling out meters for customers cannot be their priority.

“Meter production is a huge investment and loading the Discos with that responsibility will not serve our purpose as a nation. The Discos have shown that while they have good intentions, they lack the capacity to deliver on this. So, it is best to allow other sub-sectors of the electricity industry to handle the production and distribution of meters. If that is done, the Discos will be able to face their primary responsibility of electricity distribution,” he said.

He added that the current arrangement that the meter is seen as the property of the Discos is wrong because every customer should own his own meter and be responsible for its maintenance.

In a similar vein, while former Power Minister, Professor Barth Nnaji, said the Discos should be freed from the responsibility of meter distribution so that they can devote their resources to power distribution which is their core responsibility, he also argued that the non-cost reflective tariff operational in the industry is muzzling the operators and deterring investors from the sector. He said for the industry to attract the kind of investment that will give Nigeria uninterrupted power supply, the tariff must be cost-reflective.




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