FG, Discos, Let There Be Light

energy1-min

Many electricity subscribers are still wondering why a country that prides itself as the ‘Giant of Africa’ with huge natural resources cannot be self-sufficient in energy and power supply. It seems that the possibility of getting stable power supply has been written off despite the huge amount of money spent on the sector by successive administrations, with foreign interventions which did not bring any remarkable improvement to the sector. It is worrying that despite the fact that consumers are not getting stable electricity, the distribution companies (Discos) were recently accused of rejecting hundreds of megawatts of power from the Transmission Company of Nigeria (TCN), due to their failure to pay for energy and accumulated debts.

If one may ask, why do the Discos still accumulate debts despite their aggressive revenue generation drive which forces  consumers to pay through the nose? Recently, TCN disclosed that Discos’ 30 per cent monthly remittance on invoices to the commission was responsible for the poor state of the country’s electricity services. It was also alleged that Discos had not been forthcoming in the payment of the debts owed due to cases of energy theft and low generation income which are negatively affecting transmission as well as the gas plants. However, one of the primary functions of the Nigeria Electricity Regulatory Commission (NERC) as contained in Section 32 (d) of the Electric Power Sector Reform (EPSR) Act, 2005, is to ensure that the prices charged by licensee are fair to customers and sufficient to allow the licensee to finance their activities and to allow for reasonable earnings for efficient operations.

According to recent media reports, in 2016 alone, the national grid collapsed many times and before now, Generation Companies (Gencos) had sometimes threatened to shut down their turbines as a result of huge market debts. Also, Gencos and Discos asked for more patience from Nigerians to improve electricity supply. Their plea came as they identified weak transmission network as a major hindrance in the attainment of 10,000 megawatts target set by President Muhammadu Buhari by 2019. The 11 Discos operating in the country have been fully privatised following the unbundling of the Power Holding Company of Nigeria (PHCN). They are the investors responsible for the stepping down of electricity from the high voltage of 132kv at the transmission level to the lower level of 33kv, depending on the category of customers. Discos are also responsible for the marketing and sale of electricity to customers.

They are, however, faced with various operational challenges ranging from low energy supply from the grid, obsolete equipment, poorly-trained man power, health safety and environmental issues, poor revenue generation and a near absence of investments due to poor revenues, inadequate tariffs as well as external funding constraints.  Research has shown that owners of discos bought those companies to make profit, while they failed to study the nature of the business, assets acquired, equipment as well as the environment they are going into; most importantly, the reason behind privatisation. Had all these been considered at the inception, there wouldn’t be crisis now. Therefore, in order to meet the demands of subscribers, Discos should embark on massive metering of electricity consumers, as this will bring an end to incessant energy theft and other leakages within the system. They should make these prepaid metres available and compulsory for everyone at an affordable price. This project may gulp billions of naira and Discos may not like this, because of the effect it would have on their income generation as it may put a stop to estimated and outrageous bills given to consumers.

The National Assembly should also come to the aid of the Discos by presenting a bill that will compel government agencies, barracks and departments that do not pay electricity bill to do so within the stipulated time, so that discos can make more money to settle debts and buy more energy that will improve their services to consumers. Discos should also stop inflicting more pains on Nigerians. Despite the billions spent so far in the sector, how many Nigerians can boldly say that they are satisfied with the supply they are getting? Is this how the government will continue to watch people suffer? It is unfortunate that millions of artisans who are capable of engaging in local production that can strengthen the economy have abandoned their businesses and expertise for menial jobs like Okada riding, due to epileptic power supply that is hampering their businesses. Many foreign investors that can no longer cope with high cost of fuelling generators are daily relocating to neighbouring African countries that are better than us in managing their electricity.

To be candid, if the Nigerian economy is to improve at all, uninterrupted electricity supply will play a significant role. The Federal Government should come up with a clear cut policy that will proffer workable solutions that will make electricity available at all times at affordable rates that will give consumers value for money. Also, if government can invest in the protection of nation’s pipeline grid, which is the absolute foundation of electricity, while at the same time discourage bunkering and militancy with diplomacy as well as funding natural gas power plant and work with other relevant stakeholders in expanding overpopulated urban areas to build proper power grid for power distribution and consumption, these will bring a permanent solution to the electricity problems of Nigeria.

Source: Tribune

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