Exactly nine months after the assets of the defunct Power Holding Company of Nigeria were handed over to private investors, Ejiofor Alike writes that most of the distribution companies are yet to roll out effective planS to ensure adequate metering of electricity consumption, thus giving room for energy theft by consumers and criminal manipulation of bills through exorbitant estimates carried out by their personnel
As part of series of regulatory measures to stem the tide of growing public discontent against what they call “crazy bills”, the Nigerian Electricity Regulatory Commission (NERC) had issued guidelines on estimated billing to protect customers from manipulation by the defunct Power Holding Company of Nigeria (PHCN).
The issue of estimation of bills arose from the failure of the defunct power utility company and its predecessor, the National Electric Power Authority (NEPA), to effectively meter electricity consumption nationwide.
Non-metering of electricity consumption, which is obviously peculiar to Nigeria’s electricity industry, has led to widespread energy theft by consumers and indiscriminate allocation of outrageous estimated bills by some of the distribution companies.
The Managing Director and Chief Executive Officer of Ibadan Electricity Distribution Company (IBEDC), Mr. Fortunato C. Leynes, told THISDAY that only about a half of the company’s customers were properly metered when Integrated Energy Distribution and Marketing Limited (IEDM) took over IBEDC in November 2013.
Leynes, who represents IEDM’s technical partner, the Manila Electric Company (MERALCO) from the Republic of Philippines, said the remaining half was on estimated billing.
He wondered how the power sector was run in the past without effective metering and promised that IBEDC would install one million meters within the next few years.
“With our experience in the Philippines, this is something we will say that we were surprised to learn about it because in the Philippines, all customers are metered and we see to it that there is always supply of meters for new customers coming in. We are just wondering what happened to the government in the past.
“This is something that seems to have been neglected because in an electric utility, electric meter is the cash register of the company. So, that is why it is foremost that serious efforts must be really put into buying meters and each customer must be metered,” he said.
Inadequate metering has increasingly exposed the power sector to electricity theft by customers and exorbitant bills on the part of the distribution companies.
Due to the fact that over half of the customers nationwide did not have functional meters, the staff of the former PHCN billed most of their customers on estimation as they never bordered to read the few functional meters to ascertain customers’ actual monthly consumption.
To check the excesses of PHCN, NERC came up with guidelines on estimation of bills.
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 despite NERC’s efforts to stem the tide of “crazy bills”, THISDAY gathered that 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.
Position of NERC, new owners
Today, 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, instead of an average of N3,000.
NERC, it was gathered, has approved the enforcement regulation that stipulates financial sanctions for erring Discos but is yet to apply the sanctions, apparently due to the fact that the private sector-led electricity market is still at the stage of infancy.
“The truth is that if you ask any of the Discos to pay a fine of N50 million for instance at this stage, the board will sit immediately and sack the Chief Executive Officer of the company,” Chairman of NERC, Dr. Sam Amadi told THISDAY.
At a recent meeting with the new owners of the 11 electricity distribution companies, NERC directed the new owners of these companies to unveil a metering plan that would take care of the interest of post-paid customers, who have electricity meters that are not prepaid, and those without meters at all.
In other words, the regulatory agency directed the Discos to come up with acceptable metering plans to check the high incidence of crazy bills.
For customers with post-paid meters, NERC said the plan must accommodate staff of the Discos physically visiting the consumers to read their meters, to avoid incorrect billing or over-estimation.
In the case of consumers, who do not have meters, NERC had provided a methodology that would require the Discos benchmarking the consumption by the metered consumers against the amount of electricity in the feeder to arrive at the appropriate estimated billing.
However, the new investors that acquired the Discos have listed some challenges around power generation, infrastructure, revenue collection, appropriate pricing and gas supply, as some of the factors militating against improved service delivery.
They called for cost-reflective tariffs and improved gas supply to boost electricity generation and also ensure that the investors recoup their investment overtime and make profit.
Alternative plans by discos
While some of the new owners of the Discos are currently deploying prepaid meters to ensure effective metering, others, for instance, the Ikeja Electricity Distribution Company (IKEDC) said prepaid meters were vulnerable to manipulation by customers and are working on alternative metering solutions to ensure transparency of billing and prevent electricity theft.
The Ibadan Disco has commenced the process of deploying prepaid meters, with a target to invest between N4billion and N5billion yearly for procurement of meters alone.
A spokesperson of Abuja Disco also told THISDAY at the weekend that the company had embarked on a project called CATMI, which was initiated by NERC for the deployment of meters in Abuja.
“We are currently deploying new meters under a project called CATMI, which was initiated by NERC. The programme has been ongoing,” said the spokesperson.
THISDAY also gathered that since the new investors took over, Eko Electricity Distribution Company (EKEDC) has been deploying prepaid meters to customers.
A spokesperson of the company, Mr. Godwin Idemudia confirmed to THISDAY at the weekend that the deployment is based on requests by customers.
Investigation has however, shown that Ikeja Electricity Distribution Company (IKEDC) has not been installing prepaid meters since the new investors took over.
THISDAY gathered from sources close to the company that the new investor is working on a new metering solution that will ensure transparency of billing and also prevent energy theft.
One of the sources told THISDAY that prepaid meters are prone to manipulation by some customers, who by-pass the meters to avoid payment of bills.
He said the new owners had completed studies and analysis of the Ikeja Disco network to determine what would be the best metering solution for the country.
“Some people are clamouring for prepaid meters because they are looking for the opportunity to by-pass meter and avoid paying their monthly bills. The company has discovered that it is easy to by-pass prepaid meters. So, they have enumerated the customers and analysed the best way to distribute power,” he said.
To get rid of estimated billing and energy theft, he said Ikeja Disco and its technical partner, KEPCO had completed relevant studies, adding that rather than installing prepaid meters, the next phase would be the deployment of smart meters, which the company can remotely read from their offices, without going to customers.
“If anybody tampers with the meters, the company can detect it from their offices. The transformers and cables will also be included such that if anybody tampers with them, it will also be detected. We have concluded the studies and the next phase is the deployment of the smart meters and we are looking at either inwards or collaborating with our foreign partners. At the end, we will get rid of estimated billing and energy theft,” he said.
Another source close to Ikeja Disco said the company does not encourage high estimated billing, saying that several cases of high estimated billing have been resolved in favour of the customers.
THISDAY however, gathered that majority of the Discos encourage estimation of bills and are actually sabotaging NERC’s efforts towards effective metering because they make more money through estimation of bills.
A worrisome trend still prevalent under the new electricity market is that members of staff of the Discos do not encourage customers to pay official bills.
This accounts largely for their resort to exorbitant estimated bills to make it difficult for customers to pay so that they explore alternative option of ‘settlement’ instead of paying these bills.
Some customers owe N200,000 and above but rather than encourage them to pay gradually, the field workers of these Discos collect bribes monthly and allow the official bills to accumulate.
In some areas, the Discos allocate electricity bills based on each transformer and ask customers using such transformer to contribute equal amount of money to pay the bill, instead of visiting their houses to read their monthly consumption.
Allocation of bills per transformer by some of the Discos has also led to extortion of consumers and only continuous monitoring by NERC, sustained investment in meters by the Discos and vigilance by the communities and all the stakeholders will eradicate estimated billing and electricity theft.