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Electricity Distribution Companies: Service or trouble providers?

The complaints of electricity consumers in Nigeria has shifted From erratic supply, arbitrary disconnections and poor customer service, the complaints of electricity consumers have shifted to outrageous estimated billings, which the Distribution Companies (DisCos) do without remorse. Rather than monitor the consumption of power by customers, DisCo workers prepare for and send bills to unoccupied and abandoned buildings. Pushed to the wall, customers are ready for a showdown and they have the current backing of the National Assembly, reports EMEKA UGWUANYI.
FOR almost two decades, Nigeria has been in search of stable and efficient electricity supply. After experimenting with not a few models, the Federal Government settled for the privatisation of the power sector.
The anomalies in the sector over the years were blamed on long years of non-investment in power infrastructure by successive military administrations and alleged corruption in the sector as encouraged by government ownership and management.
Besides, the metamorphosis of the utility from Electric Company of Nigeria (ECN) to the National Electric Power Authority (NEPA); to Power Holding Company of Nigeria (PHCN) Plc, and to the unbundling of the PHCN into 18 successor companies – six generation companies (GenCos), one transmission company (TransCo) and 11 DisCos), which today bear different names.
The search for regular power supply began with the inauguration of a Technical Committee on the defunct NEPA by former President Olusegun Obasanjo in 2002. The committee chaired by the former Power & Steel Minister and one-time Cross River State Governor Liyel Imoke. The Imoke-panel had a mandate to raise the generation capacity from a little above generate 1000 megawatts (mw) to 4000 mw.
The failure of that effort to yield the expected dividend brought about the introduction of the Electric Power Sector Reform Bill, which the National Assembly passed in March 2005.
By July 1, 2012, NEPA transformed to PHCN Plc, which was unbundled and by November 1, 2013, the private sector was privatised, giving birth to the current 11 DisCos. They are: Eko, Ikeja, Port Harcourt, Benin, Abuja, Ibadan, Yola, Kano, Enugu, Kaduna and Jos.
Also in 2005, the Federal Government established the National Integrated Power Projects (NIPP) superintended by the Niger Delta Power Holding Company Limited (NDPHC) to intervene in all the power value chain to make power available.
The NDPHC established to fast track an infrastructure development company to manage the power projects under the NIPP scheme of the three-tiers of government (federal, states and local). The NIPP is an emergency intervention scheme to tackle the deficit and expand power sector infrastructure in the country.
The company had a mandate to develop 10 power plants with a designed ISO capacity of 5,067mw, 102 transmission lines and substations projects and over 291 distribution- injection sub stations and gas infrastructure with over 22,000 completely self-protected transformers among other critical projects. It has over 3,000mw of generation capacity available for deployment to the national grid.

The challenge

The expectations of consumer were that the privatisation of the sector in 2013 would end their plights, light would be stable, operational capacity of the DisCos would substantially improve and service delivery and customer relations would be standardised.
However, four years after, the customers’ dilemma has grown from bad to worse.  Power supply has not improved and the bills continue to grow every month. The customers that are billed on estimation are worst hit. The marketers engaged by the DisCos must meet revenue targets to keep their jobs. Their employers must remain in business to service others on the value chain – the GenCos and TranCos.
The DisCos are the only part of the value chain that interfaces with power consumers (customers) and generates the income that serves the financial needs of the value chain – generation, transmission and distribution. Since the privatisation of the sector, the government has drastically reduced its financial intervention in the sector even though it still has 40 per cent equity in the 11 DisCos.
Meeting the financial needs of the sector has been herculean for the DisCos. According to the DisCos, the customers are under-billed and for them to be efficient as expected, the power sector regulator – the Nigerian Electricity Regulator Commission (NERC), should make customers to pay cost-reflective tariffs.
The DisCos have been fighting battles on multiple fronts – with customers, the power generators and the Nigerian Bulk Electricity Trading Plc (NBET) that has accused them (Discos) of under-remitting their collections.
To prevent total collapse of the sector, the Federal Government came up with an intervention fund of N701 billion. It is to pay the power generators and by extension, gas suppliers, should DisCos and NBET fail to pay.
But ironically, as the government solved the problem in the power supply value chain, consumers’ pains tripled. The DisCos went on the rampage with outrageous billing.
The metering of customers dropped abysmally in some DisCos in preference for Estimated billing. But officials of the DisCos denied having preference for estimated billing to properly metering customers. They told The Nation that estimated billing was helping them to recover their costs.
It was learnt that the customers that are billed on estimation pay for the power lost in transit during the transportation of the energy to the DisCo from the grid, or power lost as a result faulty facilities and also stolen power by customers that feed on illegal connections and customers that bypass their prepaid meters.
An official explained: “Therefore, what the DisCos do is that when they buy power, whatever is the percentage cost of the purchase realised from customers that are metered, the remaining part of the cost including anticipated profit is factored into the unpaid cost and shared among customers on estimated billing.
“Unfortunately, the DisCos do this without checking customers’ consumption and were sending huge bills even to unoccupied premises.”

Customers’ outrage

With no end in sight for estimated billing, customers have been sending complaints and petitions to DisCos’ Complaint Centres and the National Assembly. Sometimes out of anger, customers swoop on DisCos’ staff when they go for disconnection. There have been series of protests by customers at the offices of DisCos over shoddy services.
Not a few customers are armed with their petitions to the National Assembly. The Nation learnt that the members of the Journalists’ Estate Residents Association (JERDA) Phase I, Arepo and Mokore Residents Association, Warewa are collating  complaints and petitions against outrageous billing. Both communities in Ogun State fall within the network of Ikeja Electric (IE). The action they plan to take after the collation is being kept secret.

The public hearing

Following the complaints and petitions from consumers that are before the National Assembly, the House of Representatives constituted the House of Representatives ad- Hoc Committee on Electricity Customers’ Complaints, to look into the problems and proffer solutions.
The committee began its intervention in Lagos last week by holding a public hearing for customers in the Southwest geopolitical zone. At the hearing were representatives of the DisCos in the Southwest geopolitical zone, excluding Ekiti, whose customers are serviced by the Benin Electric Distribution Company (BEDC). In attendance were: Eko Electricity Distribution Company, Ikeja Electric and Ibadan Electricity Distribution Company and representatives of the Nigerian Electricity Regulatory Commission (NERC).
The committee Chairman, Israel Ajibola Famurewa, said: “We have received a lot of complaints, petitions from Nigerians about outrageous billing and poor services rendered by the DisCos. It has got to a stage that if the House doesn’t do something about the matter, it may lead to a breakdown of law and people may take laws into their hands.
“The House in its wisdom constituted this committee to interface with the consumers, DisCos and the regulatory body (NERC) and find lasting solutions to the problems.
“We had an interactive session with some stakeholders in Abuja and decided to have proper interactions with consumers, DisCos and NERC in different geopolitical zones. We have started with Lagos in Southwest, from there to Enugu in the Southeast, Port Harcourt in Southsouth, Yola in the Northeast, Kano in the Northwest, Nasarawa in the North -central before we have a proper public hearing in Abuja.
“At the end of this exercise, hopefully we believe, I will tender our report in the House. We will look at the laws that guide the sector holistically.
“If need be to repeal some laws and re-enact, we’ll do, or amend some laws, we’ll do.  We are representatives of the people, we will do everything possible within the legislative framework to protect the interests of Nigerians who we are representing and make sure their rights are adequately protected.”
Famurewa told The Nation that his committee has six weeks to submit its report to the Green Chamber within six weeks.

Complaints all the way

The Southwest public hearing was explosive as customers hit the DisCos hard for giving them outrageous bills without commensurate power supply.
Some customers called on the Federal Government to review power sector privatisation as the DisCos, according to them, lack the capacity and competency to handle power business.
Many customers from Ikeja, Eko and Ibadan DisCos that cover the Southwest, urged the government to carry out holistic review of the activities of some distribution companies in the region over non-performance.
In his submission, the Chairman, Magodo Phase I Community Development Association, Bode Ojomo, urged the committee to enact a law that would restrain distribution companies from carrying out estimated billing without reading of meters.
He said “We are battling with overbilling and estimated billings from the distribution company, despite non-supply of power to the estate in the last three months.
“Ikeja DisCo has failed in its responsibility to customers. I urge the electricity regulator to attach stiffer sanction to non-performing Discos. Enough is enough; we cannot continue to be paying for darkness. We are paying over N35, 000 monthly on three bedroom apartment.”
Ojomo said IE needs to audit its staff as many of them are ignorant of the job they do.
“They sit in the office, make up figures and share among customers as bills. He noted that the Ikeja DisCo does not read meters, querying how houses in the estate could get the same amount on the bills issued. Do they have the same consumption level? It is not possible to have the same bills, it is fraud”, he added.
Another consumer, Mrs. Ladun Lawal, a retired civil servant in Ife, Osun State, condemned IBEDC for persistent high bills given her by the company without corresponding energy supply. Mrs. Lawal said the phenomenon of crazy bills had become a monthly ritual, which she had to contend with.
She urged the IBEDC management to train their workers on manners and how to attend to customers. According to her, the DisCo lacked service delivery, customer relations and notorious for issuing fictitious bills to consumers.
Mrs. Lawal claimed that the installation of pre-paid meter by IBEDC to customers has become a taboo as they live fat on estimated billing.
Her words: “I paid over N80, 000 for the pre-paid meter since 2016, but I am yet to receive the meter and they keep sending bills of over N200, 000 monthly to my place. It is painful that this is happening in this country. How will one access light from the IBEDC for just three hours in the entire month and the bill is mind-boggling.’’
Mrs Abosede Ogunyemi, a trader from Ekiti State under Benin DisCo, lamented the crazy billing in spite of the epileptic power supply. She added that many had waited for years to obtain prepaid meters. Mrs. Ogunyemi described the fixed and estimated billing system as fraudulent, saying the system has also been faulted by the NERC as cheating of consumers.
She decried consumers’ arbitrary billing by the BEDC over the year, adding that the estimated billing system had become means of exploiting Nigerians.
Mrs. Ogunyemi urged the government to intervene by making durable prepaid meters available to consumers.
“I stopped using public power supply since two years ago due to poor supply and unscrupulous officials of the distribution company. The officials would bring between N35,000 and N47,000 monthly when their company did not supply us power up to three hours in a whole month,’’ she said.
Another customer under the IE network said her bills were increased every month in geometrical order, from N40, 000 to N80,000 and N160,000 until it reached N400,000.
According to her, when the bill got to N80, 000, she reported at the undertaking office and they didn’t treat her matter.
She said: “So, when they (IE staff) came again, she willingly asked them to cut her supply off as it was far cheaper for her to run fuel. Besides, I only occupy the apartment with my mother and siblings and we don’t produce manufacture anything.
“I was out of grid supply for six months before the problem was resolved but throughout the six months, the bills continued coming. I have copies of the bills with me here, she told the committee.”
The same scenario played out in Enugu when the committee staged a public hearing for the customers in the Southeast at the weekend. The customers urged the Enugu Electricity Distribution Company to install prepaid meters for them and stop the over-billing and estimated billing that cause disagreements between them (customers) and the utility.
A consumer from Akwa Ibom, Mrs. Eunice Nwoye, said estimated billing made it difficult for artisans to make profit because it was high and not commensurate with the energy consumed.
She said: “It is unbearable for someone operating hair salon to pay as much as N5, 000 when the person hardly gets supply in a day. I believe if functional prepaid meters are installed, customers definitely will pay for what they use.”
Another consumer from Ogbete area in Enugu, Enugu State, Chidi Madu, complained about inconsistencies in the estimated bills for his flat.
“My estimated bills have continued to increase from N6,000 to N8,000 and now N10,000,” he said, noting that only prepaid meter would stop Nigerians from paying for what they did not consume.
Famurewa, said his committee’s report would be guided by the aggregate of the consumers’ views and their challenges.

Pockets of protests

On Thursday, last week, Badagry residents protested what they called four-hour weekly power supply and huge bills.
Women Arise President, Mrs. Joe Okei-Odumakin joined scores of the protesters who said in the last decade, they only get four-hour supply in a week. The protesters, who carried placards, marched through the coastal town, causing heavy traffic congestion on the Badagry–Lagos Expressway.
Mrs. Okei-Odumakin said: “Badagry is written in gold in our history books because it is the cradle of civilisation. So, it’s saddening that such an important place doesn’t have power supply. I learnt that for over 20 years, the power supply in the city has been extremely terrible and despite all these, residents still receive estimated bills for services not rendered. Estimated billing is evil and part of corruption. So, it must be eradicated totally. This protest would drive home our request that something must be done in that aspect.”
Ayo Akinde, a resident of Itoga Road, said Badagry residents only got a maximum of four-hour power supply weekly in the past 10 years.
According to him, Badagry residents have not enjoyed two hours of uninterrupted day time power supply in the past decade.
Akinde said: “The power situation in Badagry has become so bad that many people have moved out of the ancient town to other areas such as Agbara and Ibereko where there is improved electricity supply.”

DisCos as no respecters
of customers

Not even the lawmakers, including House of Representatives the Speaker Yakubu Dogara, were spared of the ordeal and embarrassment caused customers by the DisCos.
But the legislators have begun a progress to criminalise electricity estimated billing system.
The lawmakers said the process to proscribe the issuance of estimated bills to consumers is to propose a bill seeking to amend the Electricity Power Reform Act.
Sponsored by the House of Representatives Majority Leader Femi Gbajabiamila and others, the Bill has scaled second reading on the floor of the Green Chamber. If passed, every electricity consumer must be provided with a prepaid meter, thus ending the regime of paying for power not consumed.
The lawmakers also proposed to criminalise non-provision of prepaid meter after application and illegal disconnection of consumer’s light, among others, with a fine of N500, 000, or six-month jail term.
Failure to carry out the provision of the proposed law was to attract a six-month jail term, a fine of N1 million, or both.
The development followed the second reading of a bill where Section 67, sub-Section 1 of the Principal Act among others was amended. Leading the debate on the general principles of the bill, Gbajabiamila said that feedback from Nigerians showed deliberate extortion of consumers by the DisCos.
On the need to back the prohibition of estimated billing by law, the House Leader pointed out the difference between regulation and law.
He said: “The Electricity Regulatory body  can direct that all consumers be provided with prepaid meters immediately and by the stroke of a pen, can also direct  that the prepaid meter no longer be provided for one reason or another. So, if this is backed by law, such can no longer happen.”
Other lawmakers relived their experiences in the hands of Discos officials on estimated bills.
Dogara said he had to disconnect his house in Bauchi that was not occupied but receiving N80, 000 monthly on estimated bill.
Deputy Majority Chief Whip, Pally Iriase, described estimated bill as a serious financial oppression, adding that the sale of the National asset was faulty from the beginning. The arbitrariness of the billing is real, Iriase regretted, adding that “the people who were handed our commonwealth for nothing and making millions out of it could not add any value to it.
“These are the same people who don’t want to install the meters even after the consumers have paid for the meter, they kept on giving excuses.”
Muhammad Monguno (APC, Borno) wonder why estimated bill was alien to Nigeria’s less-developed neighbours like Chad and Sudan and others that Nigeria supplies power to.
Mrs. Nkeiruka Onyejeocha (PDP, Abia) regretted that corruption has eaten deep into the system. She described as unacceptable a situation whereby an entire community in parts of Southeast gets one prepaid meter while the bill, running into hundreds of thousands are shared by individuals within the community.
“Billing on one prepaid meter by the entire community is always causing problems every time”, she added.
Sergius Ogun (PDP, Delta) lamented that the N215 billion intervention fund given to the sector, and by extension to the DisCos, has yielded no result.

This post first appeared on Treasureweb, please read the originial post: here

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Electricity Distribution Companies: Service or trouble providers?


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