5 years after privatizing power sector, Nigerians, players in serious dilemma
Far away in November, 2013, the federal government unbundled the entire power sector into three key segments including generation, transmission and distribution.
Whereas government retained the management of transmission, it handed over both generation and distribution to private sector that are popularly known as Gencos and Discos.
For five years, Gencos had been decrying huge debt owed by Discos, while Discos continue to frustrate consumers with hard to explain crazy estimated billings even as technology driven smart prepaid meters are begging for massive rollout.
Even though the Nigerian Electricity Regulatory Commission (NERC) had introduced the Meter Access Providers (MAPs) to augment the snail speed rollout of meters by Discos who observers say, prefer estimated billings more, there are strong indications that Discos are not truly happy on the emergence of MAPs.
At the transmission level, the national grid since this year had suffered well over 10 collapses and unnecessary technical hiccups.
The general understanding of Nigerians is that the power sector, contrary to the initial claims and assurances of the supervising Minister, Mr. Babatunde Fashola that the administration will fix the sector in six months, close to end of the tenure, there had been no appreciable improvement in power supplies nationwide upon tariff jerk up that is not yet official.
Otherwise, Nigerians are paying largely for darkness when compared to monthly estimated bills sent to customers to many Nigerians; nothing has changed as far as power sector is concerned.
Currently, there are about 645 million people without electricity in Africa, with about 90 million Nigerians affected, but Fashola, who spoke at the just concluded Africa Investment Forum (AIF), organised by the African Development Bank (AfDB), in Johannesburg, South Africa, said the Federal Government is doing everything possible to reverse the trend in Nigeria.
The former Governor of Lagos State who was assigned to three strategic ministries combined as one to manage revealed that his Ministry expects over 1000 megawatts (mw) to come on stream next year.
He said “We have also put in place about 90 transmission projects in various stages of completion. We have discovered transmission has a challenge and attention has been shifted to overcoming it. There is a 10-year transmission expansion plan, government is leading on that, investing N72 billion for the immediately off-take of the 2000MW that is available but yet to be distributed. We are working with the distribution companies on this.’’
Continuing, the Minister, who served as a panellist at the ‘Powering Africa’s Transformation’ session, said about three years ago, the big conversation was that there was no enough power, the transmission system is weak.
“Today, we have enough power, but we are not distributing. It means that what we did in generation, we must do more in distribution. We have over 7000MW generation of power as at today; transmission capacity is expanding, though not at the right pace, but we are working on it. Before the end of this year, about 900MW would be delivered; 450MW has already been delivered by Azure,” the Minister of Power, Works and Housing told journalists at the forum.
Besides, in an interview with one of the MAPs licencees who have assured that its smart meter is coming with huge added value services including WiFi window and digital control, the official who pleaded anonymity decried the high level of cold feet displayed by Discos in sealing supply partnership deals with MAPs.
According to the MAP licencee, such negative and disturbing body language of Discos may mar the projected gains of the regulator, NERC in introducing MAPs.
Though several Discos contacted denied frustrating MAPs, none of them could say that it has a clear and working understanding with any MAP, thus suggesting that MAPs are not really welcomed by Discos in the first instance.
Reviewing the activities of the industry in the last five year in an interview, the Managing Director/Chief Executive Officer, Eko Electricity Distribution Company (EEDC) Plc, Mr Adeoye Fadeyibi, averred that “The power sector privatisation, from a takeover perspective, clocked five years this month. The key thing for us is for all parties to be able to deliver on the performance obligations. I think over the last five years, it has been a delicate industry, especially at the distribution end where there is an interface with the customers”.
He said “Apart from the duty of being the retailers of power, the distribution companies also have the task of ensuring that appropriate revenues are collected for the product. We inherited a lot of assets that needed quite a significant amount of investment”.
Fadeyibi added that “The issues we were raising five years ago were usually, for everybody, all around significant investments in the assets and then the turnaround time to get them even reliable enough to get us to the right level of supply.
“We have spent a lot of time just investing in doing a lot of that. If you look at the metrics of safety; the metrics of aggregate technical, commercial and collection losses for a Disco; and the metrics of revenues for the whole industry, what you then see is a significant improvement.
“I can talk about this distribution company, having taken over a year ago. We ended last year with a billing efficiency of about 86 per cent, ATC&C losses averaging about 33 per cent, and collection efficiency at 77.6 per cent.
“Average year to date, we have gone from a billing efficiency of 86 per cent to 89.15 per cent. We have gone to the extent where we are now looking at the collection efficiency of 80.3 per cent. And now one of the key important things is that we are looking at ATC&C at levels below 28 per cent.
“rom our end, everybody has screamed the song of tariff increase. But it also becomes difficult even from a government side; it is difficult for them to be able to enforce it.
“We are in a regulated environment, and at the end of the day, the regulator has the difficult task of ensuring that the market rules stay in place, which they are doing under the chairmanship of Prof. Momoh, and ensuring that, as a business, we are able to continue to stick to the basic principles on increasing our level of customer awareness.
The Chief Executive Officer, Eko Electricity Distribution Company (EEDC) Plc, Mr Adeoye Fadeyibi made it clear that “We must make those investments to ensure that our customers continue to get safe and reliable power”.
Less than one month ago, the management of Ikeja Electric, unveiled a reconstructed undertaking office in Ikeja with fanfare. Whereas industry pundits hailed the feat, the chairman of Group, Mr. Kola Adesina decried poor tariff regime and assured consumers of improved service delivery and strong customer service.
In all, Nigerians say the performances of both Gencos and Discos in the nation’s power sector deserve a forensic review this year and not even next year as planned by the government on grounds of abysmal services delivery nationwide.
