NERC Chairman, Sam Amadi
Though electricity supply has dropped to an all-time low since the new private investors took over the assets of the defunct Power Holding Company of Nigeria (PHCN), Ejiofor Alike writes that consumers are increasingly paying more in tariffs, even without official increase by the Nigerian Electricity Regulatory Commission (NERC)
Since the private investors took over the generation and distribution companies of the defunct Power Holding Company of Nigeria (PHCN) on November 1, 2013, there is no doubt that there has been a downward slide in electricity generation and supply.
Power supply, which at a certain point during the process of privatisation of the electricity assets peaked at over 4,700 megawatts, has been hovering between 2,500 and 3,500 megawatts in recent months.
Both the new asset owners and their customers have acknowledged the drop in electricity supply, which is blamed largely on inadequate supply of gas to the gas-fired power stations.
The Federal Government has also acknowledged the situation, attributing it to vandalism of the gas supply pipelines by saboteurs.
The pipelines worst hit were the Escravos-Warri stretch of the Escravos Lagos Pipeline (ELPS) which account for 190 million standard cubic feet per day of gas (mmcf/d) and the Trans-Forcados crude pipeline which supply 230 mmcf/d.
In fact, over 30 per cent or 480 million standard cubic feet per day ( MMsf/d) of the installed gas supply capacity to the power stations was out of the system between June 25, 2013 when vandals used dynamite to rupture the ELPS and March 2014 when the line was repaired.
The lost gas was equivalent to the gas requirement to generate about 1,600 megawatts of electricity
Though the lines were said to have been repaired, electricity generation which hit an all-time high of over 4,700mw in 2012, averaged between 3,500 and 2,500 megawatts since the new owners of power assets took over.
The poor electricity supply situation has been worsened in recent months by the cyclic drop in the levels of water at the hydro power stations, which normally occurs in the months of February, March, April and part of May every year.
The hydro power stations at Kainji, Shiroro and Jebba witnessed a drop in water levels, which is referred to as “low deep”, which is a cyclic natural phenomenon that occur during the first quarter of every year as a result of drought.
Poor water management and lack of maintenance of the hydro stations have worsened the situation in recent years, with occasional flooding and excessive leakage of water in the dams.
Apart from the drop in power generation from the 760 megawatts capacity Kainji Electricity Hydro Power Station and Jebba Hydro Station, the 600 megawatts capacity Shiroro Station has remained completely shut down for the past few months.
Shiroro was shut down due to low water level at its reservoirs, which resulted from a drop in seasonal rainfall especially in the North as predicted by the Nigerian Meteorological Agency (NiMet).
The situation has forced the Transmission Company of Nigeria (TCN) to embark on power rationing.
Drop in Supply to Discos
With the inadequate gas supply to the generating companies, the amount of power available to the 11 distribution companies for distribution to customers also dropped considerably.
Speaking at the just-concluded 7th Lagos Economic Summit tagged ‘EHINGBETI 2014,’ the Chairman of West Gas and Power, the new owner of Eko Electricity Distribution Company, Mr. Charles Momoh, stated that Eko Disco has a capacity to distribute 700 megawatts of electricity but is being allocated only 240 megawatts from the national grid.
Momoh said before his company acquired Eko Disco, they were promised an allocation of 450 megawatts from the national grid, but since they bought the asset, the maximum allocation delivered to Eko Disco was 240 megawatts.
“So, the people have to understand the difference between a distribution company, a transmission company and generating company. People say that since Eko Disco came, they do not have light. But we do not take people’s light. We also do not produce the light. People need to know that we have generation, transmission and distribution. We (distribution) are at the far end of it and it is what they give us that we give to the people. We do not keep anything behind. We give people everything we get. If we keep anything behind, it means we are just burning money,” he explained.
He said the major constraints against reliable power supply were ageing infrastructure and shortage of gas.
Corroborating Momoh’s position, the Managing Director of Sahara Power, the new owner of the 1,320 megawatt-capacity Egbin Power Station and the Ikeja Electricity Distribution Company, Mr. Kola Adesina, stated that Ikeja disco has a capacity to distribute 950 megawatts of electricity but has received a maximum of only 407 megawatts since the investors took over in November 2013.
He said in the previous seven years before the investors came on board, the distribution company received a maximum of 650 megawatts but only for two days.
“People do not know that the man that distributes electricity will have nothing to distribute if there is no gas. So, the very first thing that requires urgent attention is for us to get the gas readily available for us to be able to transmit and distribute the capacity that is desirable,” he said.
“Since we took over, the highest capacity that has been deployed by the Transmission Company to Ikeja Disco was 407 megawatts. If you do not have power to distribute, you cannot distribute power. It is what is given to you that you take. At one point on a Sunday we were able to get only 118 megawatts from the system,” he added.
Paying More For Darkness
It is therefore surprising that even though all the distribution companies have acknowledged that power has dropped since the private investors took over, Nigerians are now paying more than when supply was relatively stable.
It appears the trend since the new owners took over is that the more the electricity supply to homes, offices and industries nosedive, the higher the bills customers are asked to pay by some of the 11 distribution companies across the country.
Some of the distribution companies have continued to manipulate exorbitant figures and pass them on as customers’ monthly bills, without reading the meters to determine actual consumption.
This development has continued unchecked since the private investors took over, even when there is no official increase in tariffs by the Nigerian Electricity Regulatory Commission (NERC).
Today, there is widespread public discontent against what electricity consumers call “crazy bills”, which they have continued to pay without commensurate service delivery.
Some of the Discos have actually resorted to the indiscriminate allocation of outrageous estimated bills to their customers, instead of reading the meters to determine their actual monthly consumption, contrary to NERC’s guidelines on estimated billings.
NERC’s guidelines stipulate that the “distribution companies shall endeavour to obtain an actual reading of all meters recording electricity usage at all supply addresses within their areas of operations every month, or at such intervals as approved by the commission”.
The guidelines also stipulate that estimated billings shall apply only to customers, who do not have meters or whose meters are non-functional.
According to the guidelines “every DISCO shall endeavour to read the meter, at least, once in three months and the estimated bills issued shall not amount to a figure in excess of the cumulative average of the customer’s consumption.”
But except few customers, who have prepaid meters, majority of others are slammed with outrageous estimated billings monthly by some Discos without recourse to the customers’ actual consumptions as indicated on their meters.
Resident 2 (R2) customers, for example, who consume an average of 180 units monthly at N12.87 per unit when supply is fairly stable, are made to pay estimated bills of between N5,000 and N12,000 monthly by some of the Discos.
The exorbitant bills are far higher than the customers’ actual consumption, which average N3, 066.6, including a fixed charge of N750 monthly.
Critical Role of NERC
NERC, as the apex regulator of the electricity industry is supposed to check the excesses of the new investors, knowing full well that the private sector is always driven by profit motive.
In his remarks at recent Lagos Economic Summit, a former Minister for Power, Professor Bart Nnaji, stated that for the power reforms to be sustained, the regulator has to be strong to ensure continuity and protect the consumers and investors.
Nnaji said it was very critical for the country to have a very strong regulator that would not be beholden to anybody but the Nigerian public it was meant to serve.
He acknowledged the critical role of NERC, saying the agency has to be strong and with the will to deliver.
“One of the things you heard from the former President of Georgia is about institutions, so that when he left office, things continued to work. What we wanted to do in the power reforms was to create those institutions and environment, whereby if we leave, they will continue to function. These are the kind of structures created in the telecom, so that if somebody comes today and wants to take away your phone, you will fight because you do not want to go back to those days you have to pay to get a line to your house. You are now a free mobile entity – you and your phone and your phone company,” Nnaji explained.
Though NERC has promised to approve the enforcement of a regulation that stipulates financial fines against any electricity distribution company (Disco) that imposes outrageous bills on customers, Nigerians are still facing official extortion by some of the 11 discos.