The Pre-paid Metering Fraud

Fri, Mar 22, 2013

By publisher

11 MIN READ

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Officials of Power Holding Company of Nigeria devise ingenuous ways of defrauding consumers including those on pre-paid billing system

|  By Anayo Ezugwu  |  Apr. 1, 2013 @ 01:00 GMT

THE Power Holding Company of Nigeria, PHCN, formerly National Electric Power Authority, NEPA, is like a pig which loves to remain dirty. As the saying goes: “Wash a pig, comb a pig; a pig remains a pig”. In the same vein, the PHCN is a corrupt institution. No matter whatever reforms are introduced by the federal government to fight the endemic corruption in the company, its officials will always find a way out to remain corrupt.

One of the ways through which PHCN officials perpetrate corruption in the company is the introduction of estimated bills otherwise known as “crazy” bills. As the name implies, estimated bills are not based on actual energy consumption by the consumers. What makes the bills crazy is that they get fatter when the electricity supply to consumers is more erratic.

Many consumers thought the PHCN had found a permanent solution to complaints of crazy bills when the pre-paid electricity metering debuted in 2007. Unfortunately, its officials have found ways to abuse the computerised electricity billing system

Realnews got wind of the latest scam in the PHCN when one of its staff, who was defrauded at the vending office at the Ojodu Business Unit, Magodo, Lagos, brought a complaint to the office. On investigation, the magazine found out that some customers have been complaining of being cheated by PHCN vendors. According to the staff, his first experience with the syndicate behind the pre-paid fraud started on October 22, 2012, when he went to recharge his prepaid card. He paid N4000 and after all the necessary deductions, the receipt showed that the remaining amount could buy only 126 kilowatts of the electricity.

“I thought the operator had loaded that quantity of energy into my card, but when I got home, I observed that the remaining kilowatt in my meter was 80. When I slotted in my card, I was expecting to get at least 200 kilowatts, but what I had was not even up to the 126 kilowatts I had paid for.”

The staff returned to the PHCN office to complain but the official who attended to him, could not explain what happened.  Again, on January 18, the staff witnessed a repeat of the prepaid fraud when he recharged at the same PHCN office with N4000. He narrated his experience thus: “Early this year, I went again to recharge with N4000 and after all the deductions, the receipt showed that the remaining amount could only buy 186 kilowatts. He pretended to have loaded my recharge card. And because of my last experience, I checked the meter reading before recharging. When I slotted in the card, nothing showed. I asked myself, what is happening? Is it that I put in the card wrongly? I tried again and the meter reading didn’t change.”

The staff went back and complained thus: “My meter was reading 50 kilowatts that day and if you add it to 186, it would be around 236 kilowatts, but it was still reading 50 kilowatts.” The vendor collected the card from me and  slotted it into the vending machine and told me: “but there is credit” I asked him what the credit was but he dodged the question and returned the card to me. He then referred me to an officer who, he said, would look into my complaint, When I met the officer, he collected my card and wrote my name at the back with a red biro. I asked him why he had to do that. His explanation was that he tried to avoid a mix-up since he handled a lot of cards from complainants daily. Thereafter, he went to the vending office to discuss with the operator while I waited in his office. He came back after 20 minutes to lecture me on how to properly hold the card while slotting it into the prepaid meter. I told him I needed no lecture on re-charging but he insisted that if I did what he said, the quantity of kilowatts loaded in the card would surely reflect on my meter. After some cleaning on the card, he gave it back to me and I left his office. When I got home and recharged the meter, it read the exact quantity of kilowatts I had paid for. When I went back in March to pre-pay, the card was correctly loaded but I met some customers who were also complaining of pre-paid metering frauds they also suffered in silence. They refused to identify themselves. But one of them said he was not the caretaker of the property and would therefore not grant press interview.”

On March 18, in the course of this investigation, Realnews also met a retired nurse at the Magodo vending office who complained bitterly of being cheated by PHCN officials. According to the nurse, they changed from analogue to the pre-paid meter and PHCN officials asked her and the husband, who is also a retiree, to pay N11, 000 to clear their previous bills. They did. But surprisingly, when they bought the pre-paid card, what was loaded for them fell far below what they paid for. When the nurse asked the PHCN vendor for an explanation, he told her that may be, she was owing some money. “I don’t understand. It  appears that they are cheating us. How do they expect me and my husband to be raising N24,000 to pay every month just for electricity. Our children are far from us. How do they expect us to cope?” the retired nurse, who wishes anonymity, complained to Realnews.

While at the Magodo office Realnews met with another customer who complained that she was being made to pay higher than what she used to pay for energy per kilowatt. She said that she had complained to the PHCN office at Ikeja for more than one month nothing was done to correct the error.

The hiccups with the new electricity tariff regime introduced in June 2012 by the Nigeria Electricity Regulatory Commission, NERC, could be as a result of some design error. A staff of the former minister of power confirmed that there were flaws in the design of the tariff structure. Some people pay higher than they should pay while some pay less than they should. We identified it and had taken measures to rectify it,” the official said.

Confronted on the fraud allegations, Olaitan Ogunyede PHCN officer in charge of pre-paid metering and E.O. Chiemeka, revenue manager, Ojudu Business Unit, said shortchanging electricity consumers who use prepaid cards was not possible because the system is computerised.  Chiemeka said no one could have access into anybody’s account unless the person has a pre-paid card which is always in the possession of the consumer. But the two officials failed to address the issue of a possible manipulation of the vending machine at the card-loading stage. In computer palance, it is often said: “garbage in garbage out”.

But Sam Amadi, National Electricity Reform Commission, NERC chairman, does not feel pre-payment metering system fraud is possible. However, he has requested any consumer who has fraud complaints to write to his commission. “It could be a mistake or fraud. We will have to investigate what it was,” he said. Amadi also told Realnews on telephone March 18, that he was not aware of any design error in the tariff regime. “I don’t know about any design error. If they are having problems, it means that they are not doing what they are supposed to do,” he said.

The design error is not the only problem electricity consumers are battling with. They  are also having challenges with recharging pre-paid cards, non-availability of the prepaid meters, crazy bills, meter maintenance fees, and repair of transformers or replacing poles. Some of the customers, who spoke to Realnews, expressed dissatisfaction with PHCN services.  Ogana Ikechukwu, a resident of Ojo, Lagos, said he paid N25, 000 for a pre-paid meter in 2010, which the PHCN installed in his compound in 2011. “My major challenge now is recharging the meter. It takes me about two to three days to recharge the meter. Most of the time, when you go to the PHCN district office in Agbara, Lagos, they will tell you that there is no service in their system. They tell you to go to FESTAC town to recharge. But at times you face the same challenges in FESTAC town. Even the deductions made as monthly charge are enormous compared to what we were paying before the increment in tariff. Even the units of kilowatts that appears in your receipt in some cases are not the same when you recharge your meter,” he said.

Adesina Onabule, a resident of Ikorodu, Lagos, said it took the PHCN one year to install the prepaid meter in his compound. “When the meter was installed on December 28, 2012, tenants living in the mini-flat apartments were surprised when they went to buy a recharge voucher to hear from PHCN, Odogunyan service centre, that they have no registered account number. The tenants were told to pay N2, 650 for an account to be opened in the name of the new meter. Meanwhile, they have been paying monthly electricity bills without a meter or bill. They were asked to pay estimated bills for about one year,” he said.

Also another resident of Ojo, Lagos, who wishes anonymity, said: “We paid for this meter since last year and whenever I go to the Agbara office to ask of it, they will tell me that the meter is not available for now. Presently, some PHCN officials are threatening to disconnect us if we do not install the prepaid meter before the end of the month. We don’t know the next step to take,” he said.

Ifeanyi Edeh, a consumer in Ojo, said he had been receiving high bills for a while now. “In the last six months, I have witnessed inexplicable billings which are not justifiable since there has not been regular supply of electricity. We used to receive bills between N4, 000 and N4,500 before now, but the amount has jumped to between N7, 000 and N8, 000 in the last six months,” he said.

Evan Okolo, a consumer in Independent Layout, Enugu, said the high bills the PHCN has been giving them for the past five months are crazy. She explained that the PHCN refused to supply the compound the prepaid meter the tenants paid for since last year and what they get instead are bloated bills every month.

“Early last year our bill was between N3000 and N4000, but since we applied for the prepaid meter our bills are now between N12,000 and N13,000. We are not the only people suffering in silence because of this high bill here in Enugu. The problem of this bill is that they bring it even when there is no electricity supply for a month. And when you don’t pay,  they would cut off your cable and you must pay reconnection fee before electricity supply could be restored in your compound,” she said.

Raji Yusuf, a consumer in Alaba-Oro, Lagos, said that the PHCN gives the residents of Alaba-Oro erratic bills in spite of poor electricity supply to the community. He said that estimated bills are common in the community and they do not understand why PHCN places them permanently on estimated billing. According to Yusuf, estimated bills were sent to the residents between December and March in spite of the total blackout in the community. Some residents paid as high as N14,000 per month.

Defending the dubious estimated billing system, a PHCN official in Ojo, Lagos, said the PHCN does not give estimated bill to the consumers. According to him, the system picks the minimum consumption of consumers over a period of time to determine what someone who is on the PHCN database should be billed. “We don’t give crazy bills to anybody. Everything we do is on the database and we charge consumers according to their consumption per month,” he said.

At the PHCN Agbara/Badagry district office, A.K. Ibrahim, manager, public affairs, said he was not in the position to answer questions on the prepaid meters and that all the questions should be directed to his boss at the corporate headquarters in Marina, Lagos. “This is a policy issue and I cannot say anything on it. Go to my superior officers at Marina, who can grant you interview. There is a hierarchy in public service, I can’t speak on this issue,” he said.