ECN, NEPA, PHCN, DISCOs: How Nigerians pay for darkness, PART 4

Mike Ozekhome, SAN

By Mike Ozekhome, SAN, 

Introduction

IN our last three outings on this vexed re-occurring issue, the poor performance of Nigeria's hitherto state-controlled power sector, resulting in unstable electricity supply and frequent blackouts, has long been seen by ordinary Nigerians as evidence of the ineffectiveness of the government.

However, the situation has not improved much since the privatisation of much of the power sector in recent years, even with continued government subsidies for some users. Today, we shall further x-ray other jurisdiction draw the curtain and proffer possible solutions for reliable electricity in Nigeria.

ELECTRICITY GENERATION & SUPPLY IN SOME COUNTRIES

According to a study by Pacific Northwest National Laboratory, existing U.S. electricity infrastructure has sufficient capacity to meet about 73% of the energy needs of the country's light-duty vehicles. According to deployment models developed by researchers at the National Renewable Energy Laboratory (NREL), the diversity of household electricity loads and EV loads should allow introduction and growth of the PEV market while & “smart grid” networks expand. Smart grid networks allow for two-way communication between the utility and its customers, and sensing along transmission lines through smart meters, smart appliances, renewable energy resources, and energy efficient resources. Smart grid networks may provide the capability to monitor and protect residential distribution infrastructure from any negative impacts due to increased vehicle demand for electricity because they promote charging during off-peak periods, and reduce costs to utilities, grid operators, and consumers. The National Renewable Energy Laboratory (NREL) analysis also demonstrated the potential for synergies between Plug-in Electronic Vehicles (PEVs) and distributed sources of renewable energy. For example, small-scale renewables, like solar panels on a rooftop, can both provide clean energy for vehicles and reduce demand on distribution infrastructure by generating electricity near the point of use. Utilities, vehicle manufacturers, charging equipment manufacturers, and researchers are working to ensure that PEVs are smoothly integrated into the U.S. electricity infrastructure. Some utilities offer lower rates at off-peak times to encourage residential vehicle charging when electricity demand is lowest. Vehicles and many types of charging equipment (also known as Electric Vehicle Supply Equipment (EVSE) can be programmed to delay charging to off-peak times. & “Smart”models are even capable of communicating with the grid, load aggregators, or facility/home owners, enabling them to charge automatically when electricity demand and prices are best; for example when prices are lowest, aligned with local distribution needs (such as temperature constraints), or aligned with renewable generation.

HOW THE POWER HOLDING COMPANIES HAVE BEEN GIVING OUTRAGEOUS BILLS IN NIGERIA

Electricity consumers in various parts of the country have been groaning under the outrageous electricity bills foisted on them by the distribution companies.

Ideally, the amount of money paid by an electricity consumer should depend on the number of appliances used in a building, for how long they are run and the customer class the building falls under. We have eleven Distribution Companies (DISCOs), and since then we have been dancing Reggae in darkness. So, we have sub entities like Eko Distribution Company, Ikeja Distribution Company, Port Harcourt Distribution Company, Kaduna Electricity Distribution Company, Benin Electricity Distribution Company, Jos Electricity Distribution Company, Ibadan Electricity Distribution Company etc. etc. Successive governments have tried but failed to reform Nigeria’s energy sector.

The new trick they use to reap off Nigerians is the use of Estimated billing system. This is the practice of billing where the electricity provider does not need to read your meter to ascertain what a customer consumes before billing him.

The service provider results to this when a customer is not metered and on some occasions even those with meters get billed out of guesses by those in charge of billing. The old practice for billing used to be that certain staff covering a given area is sent to check meters and with this get the details as to how much is being consumed. Since, they because lazy all of a sudden, all they do is make guesses and bill customers outrageously.

The challenge of metering the customers is a situation that predates the current private service providers. The situation existed even at the time when government through NEPA/ PHCN, provided the electricity service and what was employed to recoup some investment then was the use of estimated billing. The difference however, is that while government may not insist on recouping every kobo it put in to provide the service, the private operators would not only insist on recouping but would ensure that it makes profit from its investment. The private operators, who privately source for funds to invest and provide the service, is now biting deeper and harder into its customers pocket to repay their debts to the debtors, service their logistics and make profits for their shareholders. This explains why they outrageously reap Nigerians and the government cannot question those who are responsible for this havoc.

Even at this rate, the Distribution Companies (DISCOs) service providers have continually to complain of revenue losses, expressing fear of failure to service their debts if the Nigerian Electricity Regulatory Commission continues to turn down their request for upward review of electricity tariff.

Their excuse is that the tariff is not realistic and not cost reflective. Thus far, the commission has stood its ground and refusing to yield ground, saying they must come forward with cogent and verifiable reason why their needs should be met.

NIGERIA’S METERING SYSTEM

Metering is referred to as use of installed device to determine the amount of electricity power consumed by the end user. It enables measurement of electrical energy. This system can be either postpaid metering or prepaid metering. Postpaid was predominantly used in Nigeria decades ago and it is still in use in places where prepaid have not been installed. Postpaid metering is the use of metering device that affords reading and determination of the amount of electricity consumed to which the end user is billed to pay after using the electricity for a certain period, usually a month. The system is fraught with series of challenges that covers estimation of bills rather that gives room for DISCOs to cheat the electricity consumer overpriced energy consumption, associated unfairness in the billing method and bypassing of the meter by consumers.

On the other hand, prepaid metering offers the electricity consumer to buy credits such that electricity usage is limited to the credit unit purchased. It is where an electricity consumer pays for the electricity prior to its usage. It is worthy of note that the huge electricity consumer debt profile and difficulties in bill/revenue collection were some of the drivers of prepaid metering in Nigeria.

This approach provides electricity consumers with the opportunity to track their electricity spending as well as being able to check the credit unit balance. Service providers as well benefit from prepaid metering through reduction in electricity associated costs, bad debts reduction, improved cash flow, and detection and management of power outages. The implication is that the prepaid metering offers a leeway as well as means of encouraging and sustaining the attitude of regular payment of electricity used by the consumer. Meanwhile, this does not imply that prepaid metering does not present its own challenges as evidenced in many African nations like Uganda and Rwanda.

Some unmetered electricity consumers have been complaining of receiving outrageous estimated bills from the electricity distribution companies. There has not been an official implementation of any hike in tariffs by the Nigerian Electricity Regulatory Commission, some consumers under the various distribution franchise areas alleged that estimated electricity bills had been on the rise, year in, year out. It was also gathered from consumers that aside electricity bill concerns, they were also worried by the irregular supply of electricity across the country and this has caused many consumers to exit the national power grid. For instance, on July 6, 2021, the ministries of Works and Housing and Environment officially moved away from receiving power from the grid.

The Lagos Chamber of Commerce and Industry, LCCI, whose members are ripped off by the outrageous electricity bills, joined in calling on the National Electricity Regulatory Commission, NERC, to urgently address the growing concerns of electricity consumers who are inundated monthly with over-bloated bills. LCCI also called for an urgent review of the concept of fixed charges.

POSSIBLE SOLUTIONS FOR RELIABLE ELECTRICITY IN NIGERIA

Study Advanced Countries: There are so many countries that have succeeded in having 24 hours electricity supply, year in and year out. One of such countries is the United States of America. It would go a long way if

Nigeria can work with the United States to fix this perennial problem. A team of engineers could be sent to the US to understudy their method of power generation and supply and that model can be adapted in Nigeria to curb inadequate power supply in Nigeria.

PUBLIC/PRIVATE COLLABORATION: One of the present complaints about the electricity distribution companies is their irregular billing which many Nigerians term exorbitant. Since Nigerians complain that power supply has greatly dropped but monthly electricity bills have skyrocketed. They also lament that meters are never checked and bills are estimated out of the blues.

GRANTS: Many organizations can give money to improve the general infrastructure directly. The World Bank gave Nigeria one such grant in 2018 of around $500 million. This money focuses on increasing access to and stabilizing the already existing power grid that supports 50% of the population. Although $500 million may seem like a lot of money, it’s an investment that can pay off for American and other developed countries’ businesses, as Nigerians can make more wealth and spend it in other parts of the world.

UPGRADE OF TRANSMISSION EQUIPMENT: No doubt Nigeria is under producing electricity. This is not necessarily from non-availability of power plants. It is as a result of the fact that some of these power plants do not work. The power generated nationwide thus drops because of the non-functional plants. In order to fix this problem, the available power plants and other equipment for the generation and distribution of electricity should be fixed and properly maintained.

INCREASE IN EFFICIENCY BY NERC: The National Electricity Regulatory Commission also known as NERC as the body responsible for regulating electricity in Nigeria should up their game in the efficiency of carrying out their duties.

Since the commission is responsible for forming electricity tariffs, reviewing of power tariffs and promotes electricity policies, they should do so considering that most Nigerians pay heavily without actually enjoying electricity supply. They should upgrade their policies to a level that is environment friendly. Apart from NERC there are several other agencies that have control over power in Nigeria. They are: Federal Ministry of Power, Nigeria Atomic Energy Commission, Nigerian Bulk Electricity

Trading Company Plc and Nigeria Electricity Liability Management Company. To improve the power sector, these agencies should come up with better policies that would build on efficient, past policies and do away with impractical and inefficient policies.

Usage of more Solar Energy

Solar power is simply using the sun’s light as energy. This can be done by using a solar cell to convert the sun’s light into electricity, using solar thermal panels that use sunlight to heat air and water, or passively using the sun’s energy by letting sunlight enter through windows to heat a building.

Thereby converting a natural source (the sun) into electricity. This alternative is rapidly becoming the trend in Nigeria as it can be spotted in most hoses and businesses. It is economically and environmentally friendly and allows for heavy equipment to be used by solar. Also, innovative and new products are coming up which do not use electricity as a power source but rather use solar in Nigeria.

KN