Nigeria needs about 160,000mw to have 24 hours uninterrupted electricity across the country’
Barrister Sunday Oduntan is the Director of Research and Advocacy for the Association of Nigerian Electricity Distributors (ANED), the umbrella body of the country’s electricity distribution companies.
In this interview with EMEKA ANUFORO in Abuja, he speaks on the challenges of the power sector, the challenges with metering all consumers immediately, and how government’s support is still required to achieve 20,000MWs in the medium term.
What is the fate of the over five million unmetered customers?
The current economic reality has made this task even more difficult. There are many factors that determine its success. The exchange rate is one of them as well as bank interest rate and others. What it means is that if before you could buy a dollar for N200 and you have N200, 000 you will be able to buy $1,000, but today if you have N200,000 you can hardly buy up to $500 to $600. Meanwhile, maybe your source of income has not changed but you are buying foreign currency higher. As the rate fluctuates, so does your purchasing power.
We have a new tariff now but the naira has gone worse against the international currency like the dollar. However, we cannot increase tariff just because dollar has gone up and when dollar has gone down we are not going to reduce tariff.
Some Discos are doing their job and we have to praise them that in spite of all those challenges, they are making serious effort to meter customers. In Abuja, it is being done cluster by cluster but unfortunately the issue of meter is very emotional to people. If they have not taken meter to your area, for instance, you have every right to be aggrieved but it does not change the fact that other people have gotten theirs and more are being metered daily.
Everyone is entitled to meters and I apologise that it is taking so long. It is so because we met a missing gap of five million meters. For more than 32 years, NEPA and PHCN just ignored the job of providing meters.
Some communities have also refused to be metered. There is a community in Akwa Ibom State, Ikot Abasi, the Port Harcourt Disco went to meter them, but they beat them up, seized their vehicles and meters because they don’t believe that they should pay for electricity.
The same thing occurred in New Bussa in Niger State, a Disco went there and offered them meters. They refused and vandalised them, saying they don’t want meters. These are the kind of challenges that we face in the sector. It shows that there are some Nigerians who don’t like to pay for electricity bill; they don’t even like paying any bills of any sort.
How are the Discos addressing the poor state of power supply?
We are all customers of one DisCo or the other. For instance, all of us here are the customers of Abuja DisCo. The power supply has not been good of recent, but it is not the DisCos’ fault.
The fact is that if we take it that we are on a five-step journey, where we are today is just step two. However, by the time we get to the final step, it will be a total reformation of the power sector.
We will get to a point where one can choose his own power distributor just by a phone call.
In England where I lived for 26 years, I lived in the South of England towards the coast and I was using Scottish power which is far from England. With just a phone call, you can change your service provider just like the telecommunications firms now, but that is a long way off.
Our challenges are primarily because the country is producing far less than a quarter of what it requires. With a country that has a population of over 160 million, and going by the rule of thumb for electricity provision all over the world, we need to generate 1,000 megawatts (mw) per one million citizens. This means Nigeria needs about 160,000mw to have 24 hours uninterrupted power supply across every nook and cranny of the country, but that is a distant target so we have to go back to the reality.
If we exclude those who generate power for themselves like some churches and other big companies like Dangote – if they continue to generate for themselves and do not depend on the national grid and if some other big companies can also emulate that – for us to have uninterrupted power supply or at least guarantee 18 hours of power every day to those who are currently connected to the grid, we need 20,000mw.
What challenges do Discos face?
I just want to let you know that out of our total generating capacity, what we have right now is less than 4000mw. This is due to vandalism, which has affected generation. For us at DisCos, we can only distribute to you what we have.
Once there is vandalism – mostly in the Niger Delta – there won’t be enough gas to fire the power stations and if there is no light, the DisCos are called names. However, when we collect the bills, only 25 per cent of it belongs to us. Sixty percent goes to the generation companies who also pay for the gas supplied, 11 percent goes to the Transmission Company in Nigeria (TCN) while 4 percent goes to the other stakeholders including NERC, the regulator.
Of course, when there is low distribution there will be low collection and there will be no money to pay the gas suppliers. Everybody needs to play their role, because once the chain is broken, the system suffers. For instance, if we have 5,000mw and people are not paying as we experienced recently when we had it, our losses increase. With higher supply, we expect that there should be an increase in our revenue having given more light, but it is not so.
Those who are metered are now bypassing their meters; so many with pre-paid meters are bypassing it and every such act affects all parties. When they bypass we don’t know though for places with smart meters, they can still bypass it, but the difference is that we will know. For everyone that bypasses his meters, it means they are using electricity free and it is affecting whoever else is on that transformer with them that is on estimated billing.
This is why we have what customers now call ‘crazy bills’. We are not crazy and we do not want anybody to be crazy but we look at the transformer that takes light or supplies to your house and we take away the people with meters. The balance of it, we go by the estimated billing methodology given to us by NERC and at the end, we have cases of some people being overbilled which is very unfair. Conversely, we also have cases of people being under-billed. When they under bill them, nobody will talk. We just keep quiet as if it is a normal thing.
There is an order that DisCos must meter all consumers. What are you doing on that?
I have just mentioned that we are embarking on that. We are currently embarking on aggressive metering. NERC in October last year made a pronouncement that we must meter all our customers by October 2016 and we told them that is not realistic. You cannot talk about one year for five million meters.
How many can the DisCos meter then?
A Disco can do an average of 20,000 every month and we have 11 DisCos. It is really not possible to do more than that.
Discos have been accused of not doing enough to collect their bills…
The solution to it is very simple. What you can also do for us, as journalists is that if you see this, you will just make it known because if they are not giving people bills and people are using electricity and you don’t expose it, it will affect all other customers. If my electricity is going to your neighbourhood and I am not going to collect the money and you are using it, well it is our problem because what it means is that my debt will grow and the system will shut down.
With the removal of fixed charge, how do DisCos repay CAPMI customers?
The CAPMI refund is automated. The moment your meter is been configured for your property, the information in your record is already put there. If there is any customer that you know that has not being refunded and the person is sure, we can only treat each case on its own merit. It is automated and you will get a refund and the refund is very little at each recharge. It happens over the period of two years with an interest of 12 percent.
For the bills, the simple way I can explain is that when you recharge, first look at the tariff and see the particular amount added to it. For instance, if you buy electricity worth of N100, you could get 5 units added to it. If you check you will see it but don’t expect that you will have substantial of amount money at once. It is spread over a period of over two years.
You said Forex fluctuation is affecting the importation of meters, why not patronise local manufacturers?
The issue is that of capacity. Meters are not just things you can pick from the shelf. We are willing to patronise them. It will be more convenient that I can buy my meters in Lagos but there are issues: right now, most of the metering we are doing under the CAPMI scheme are supplied by the local meter assemblers, but there are still issues on ability to meet quantity needs and capacity. Also, to buy from them, we have to first ask how much they sell them. Of course, if it is more expensive than the imported ones, then we have to import because we are running a business.
If you cannot give me the quantity that I need and you cannot do what I order for you to do for me, we have those who are willing to do that and even with vendor financing. It means if I don’t have N10 billion to buy meters and somebody is saying I will give you vendor financing by supplying the meters to be paid for over three years, we will take that option.
The Nigerian meter manufacturers have their own challenges with the banks. Nigerian banks don’t finance the real sector and if the interests are as high as it is now, they have challenges. Because of that, they want us to buy on a cash-and-carry basis. If I don’t have the cash and someone is willing to sell to me on credit, I will have no choice, but to patronise such person.
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