Fashola and the rocket science of power – Part 2

Continued from yesterday

By Fashola’s reckoning, gleaned from his various public statements, solar and coal cannot make any significant contributions in the short or even medium term. The technicalities and financial implications of harnessing wind power render that option virtually impracticable. A solution – political or military – must, therefore, be found to ensure uninterrupted flow of gas to the generating plants.

But generation is not Fashola’s only headache. While a market-reflective tariff seems to have been achieved at the instance of the Discos, the sector regulators have done little to enforce the metering of consumers and the stoppage of crazy billing. Of the 6, 159,775 electricity consumers in Nigeria as at the end of March 2016, only 3,206,599 representing 52 per cent have functional meters. The other 2, 953,176 customers representing 47 per cent are not metered and subjected to crazy bills by the Discos. According to figures released by the Nigerian Electricity Regulatory Commission (NERC), the 11 Discos installed only 403, 255 meters between November 1, 2013 when they took over and March 2016. Of that number, the Discos financed only 151, 724 metres or 38 per cent while customers bore the cost of 251, 531 meters or 61 per cent of the installed meters through the Credit Advance Payment for Metering Implementation (CAPMI). There is thus a long queue of customers who have paid for meters but are yet to have them installed – a double jeopardy of paying for undelivered goods by a supplier who continues to earn a premium on his non-performance through crazy billing.

The crazy bills have no bearing to the actual consumption by unmetered customers. Even now that generation is down by 70 per cent to about 1,500 mw, this reality is unlikely to reflect in electricity bills for the period. NERC can do more than threaten the Discos with the winding down of the CAPMI scheme. They should be made to pay commercial interest rates to customers from the time of payment to installation. The commission should compare Discos’ aggregate revenues from unmetered customers with the electricity transmitted to them for each period under review. This is not difficult. Apart from the vulnerable customers, every operation along the generation – distribution chain is metered. As Fashola explained in the FAQ series, the gas sent to the generating companies (Gencos) is metered while the output of these Gencos is metered at the point of delivery to the Transmission Company of Nigeria (TCN) which also meters its output fed to the Discos. The Discos meter their supplies to their various districts. The NERC can easily establish a correlation between the output of Discos and their eventual aggregate revenues – not based on their arbitrary targets but actual consumption – from metered and unmetered customers. This way, the commission can curtail excessive billing which has become a disincentive to the installation of meters.

The Discos have nothing to lose by refusing to install meters – at least in the short run. They do not pay interest on the customers’ deposits under the CAPMI system. Rather than capture all electricity consumers and build a comprehensive database of bill-able customers, Discos seem to prefer the present dispensation fostered by the ambivalence of the regulators. It is inconceivable that out of Nigeria’s estimated population of 180 million, only 6, 159, 775 customers are captured in the Nigerian Electricity Supply Industry (NESI) database.

Besides the generating, transmission and distribution capacities, there are labour issues that are peculiar to the power sector which may be significantly different from the mainstream public service with which Fashola is more familiar. Whereas length of service holds sway in the mainstream public sector, the power sector requires a careful blend of experience and expertise, the old and the young, given the technical and dynamic nature of the industry. While the severance scheme at the point of takeover by the Discos and subsequent rationalisations have taken care of some of the inherited and aging work force, the remnants need to be trained and refocused to the reality of a highly technical and profit driven industry. As the Discos grapple with inherited and emergent challenges, they would need to mediate between their young and experienced engineers and assorted professionals on the one hand and their retiring generalists on the other for a seamless transition that may take longer to achieve. Altogether, the Discos may adopt non-conventional industrial relations approaches better suited to their peculiar situations in the face of inevitable subsequent disengagements and the injection of the much needed young blood into their operations.

Though not an engineer like some of his predecessors – Prof. Barth Nnaji and Joseph Makoju – as he himself admitted, Fashola seems to have a good grasp of the issues and what needs to be done. As the political head of the power sector, the buck stops on his table. The ultimate responsibility of getting all players in the industry to deliver steady and affordable electricity rests on him. So far, the statistics of generation look pretty bad. The long periods of power outage and unprecedented rate of system failures in the second quarter of 2016 – with the new tariff in force – have fuelled economic inactivities and poor social life. How Fashola navigates the power generation-distribution terrain in the coming months and years will be his valid proof that public utility administration is no rocket science. For generation – an uncertain victim of militant activities in the Niger Delta region – he would of course trust President Muhammadu Buhari’s discretion to do the needful – politically or militarily, but preferably politically. Ensuring uninterrupted flow of gas to the generating plants is no rocket science too.