Why Nigerians may resist proposed hike in electricity tariff

Many Nigerians were taken aback by the recent announcement by the Nigerian Electricity Regulatory Commission (NERC) that electricity consumers would pay more tariff from April this year. The general feeling was sort of: Where is the electricity consumers are supposed to pay more for? Where are the pre-paid metres that consumers are supposed to use to regulate their consumption? Or does NERC want the Distribution Companies (DisCos) to continue repressing their customers with outrageous estimated billing? Those fears are indeed justified!

Under the Performance Agreement the DisCos signed with the Bureau of Public Enterprises (BPE), which became effective on January 1, 2015, they committed to closing the metring gap and set a target of supplying 4.92 million metres within three years. However, a report by the NERC released at the end of 2017 revealed that they had supplied only 201,756 metres. That is a shortfall of 4,718,244 metres. Their annual metring target is 1.640 million meters.

In 2018 alone, they reportedly supplied 79,850 prepaid metres. As at December 2018, only 3.7 million customers, out of over eight million, had prepaid metres; indicating that 55 per cent of the customers were charged based on estimated billing. Thus, the apprehension among Nigerians is that any increase in tariff without a holistic review of the power sector that would guarantee fairness and transparency on the side of the DisCos would result in further rip-off.

But according to the regulator, the review considered changes in macroeconomic indices, particularly inflation at 11.3 per cent, exchange rate at N309.9 to a dollar and gas price at $3.30 per standard cubic feet (scuf).A breakdown of the proposed cost-reflective tariff across the DisCos showed that consumers under Abuja DisCo, currently paying N32.7 would pay average of N54.3 per kilowatt per hour (KWH).

Under Benin DisCo, customers are expected to pay average of N32.5/kwh, instead of the new N56.4, while residential customers would pay N31.26/kwh.Enugu DisCo would charge N35.3/kwh from customers, instead of N54.4/kwh, as residential customers pay N30.93/kwh.Eko DisCo would charge N28.3/kwh average, instead of N47.0/kwh cost-reflective amount, while residential customers would pay N24/kwh.

In Ikeja, consumers, who ought to pay N44.6/kwh would pay N27.3/kwh, while residential customers continue to pay N21.30/kwh. Kano DisCo would charge N52.7/kwh average, but consumers are allowed to pay N30.1/kwh, as the firm would charge residential customers N22.50/kwh. Yola DisCo would collect N57.4/kwh under cost reflective tariff, but would currently charge N26.8/kwh, as residential customers pay N23.25/kwh.

Meanwhile, against the backdrop of the nationwide angst that greeted the proposal, NERC explained within the week that it would consult extensively with consumers before the increment would be implemented.Chairman and Chief Executive Officer of NERC, Prof. James Momoh, who addressed journalists in Abuja, said: “In the next three months, we will engage you for consultations. We have given the report card of what we saw based on all indices for doing the review. We did not say it is binding tomorrow morning. We said we are going to the second thing: consultation.

“The order is simply a communication of what we have done as a regulator looking at what it takes to increase or decrease tariff. If at the end of our meeting, back and front, we say increase, there is increase; if we say no increase, no increase. It is going to be based on our engagement at the public forum.”

As Nigerians wait for the commencement of NERC’s Public Forum, where their fears would be ironed out, The Guardian captured the pulse of consumers across the country regarding the proposal.

‘Any Tariff Increase Now Will Be Counter Productive’
From Ayodele Afolabi, Ado Ekiti
Residents of Ekiti State have been victims of poor power supply and in some cases permanent darkness; no thanks to the Benin Electricity Distribution Company (BEDC) that has failed to show capacity and ability to deliver efficient and stable power supply in all the 16 local councils of the state. Also, despite the matching order given to DisCos to metre customers, nothing concrete has been done in this regard.

Meanwhile, the BEDC recently said it has commenced the process of rolling out a total of 67, 452 metres to consumers in the state through Metre Asset Providers (MAP). The company had said the exercise would assist in reducing complaints of wrong and estimated billings and reduce the burden of huge debt being owed by consumers through estimated billings. However, several months after the launch, there is nothing concrete on ground.

Mr Taiwo Osanlade, who resides at Afao road in Ado Ekiti, said that electricity supply in the area has remained epileptic despite huge tariff the BEDC has been charging those with post paid metres and who form the overwhelming majority of consumers in the state through estimated billing.“The metre they promised to roll out has not been issued to customers because they are getting so much money from estimated billings. We don’t know who will rescue us from BEDC. Currently, an average customer pays as high as N8,000 per month as estimated bill. We are under the yoke of the BEDC’s outrageous billings,” he said.

He warned against any further increase in tariff, saying that instead of an upward review of tariff, the regulatory agency should review the services rendered by DisCos and revoke the licences of erring companies.Also speaking with The Guardian, Chairman, Ado Residents Electricity Consumers Association, Dr Ibukun Ogundipe, said the BEDC has failed to live up to expectations despite its alleged outrageous billings.He said: “We have been having a running battle with them for about two years now. They have continued to bring outrageous bills even when the light is epileptic. We have resolved in Ado Ekiti that following the regulatory body’s declaration that those whose premises are not metred can’t use more than 186 kilowatts per month, our people will be paying not more than N3000 per month.

“If they come to disconnect our premises we resist them. We don’t allow them to climb our poles or take our wires away, which we bought with our money. We want to stop them from issuing outrageous bills and get refunds from the overbillings they have done since 2016.“As I am talking to you now, we don’t have light. They will bring the light at awkward time when nobody will be able to use it. Like last night, they brought the light around 10:00p.m and took it by 3:00a.m this morning when people should be sleeping. When you need the light it’s gone. We have been asking the government to compel them to bring metres so that people can pay for what they have consumed.” He urged the regulatory agency not to contemplate any further increase in electricity tariff, saying the move could be counterproductive and harm the economy as a result of industrial actions that may follow.

A resident of Omuo in Ekiti East local council, Mr. Ayodele Rotimi, described the electricity situation in the local government as “permanent blackout.”
According to him, electricity has been lacking for over three years in the entire local council. He lamented that all efforts to get the authorities to solve the problem have fallen on deaf ears.

“We are wondering if our part of the country have done something to deserve the treatment we are getting. We are less concerned about increase in tariff because nobody pays BEDC any money because we have been in permanent darkness. It will be morally wrong for anybody to ask us for money under the current situation,” he said.

An energy expert, Dr. Abiodun Ojo, who spoke on the reasons there hadn’t been regular electricity in the country, said: “You must start with the generation profile. What is the generation profile?  There is not more than 5,000 megawatts in the country. Given the rule of the thumb, 1,000 megawatts is supposed to serve one million people. We are over 180 million people in Nigeria. We should be talking of 180,000 megawatts and we are generating less than 5,000 megawatts.”

According to him, the way out is for the issue of electricity to be removed from the exclusive legislative list and allow states to develop and own power projects. Ojo also said the Federal Government has demonstrated lack of political will to “step on big toes and sanitise the power sector” by reviewing the privatisation exercise embarked upon by previous administration.

‘Give Us Pre-Paid Metres Before Any Tariff Increment’
From Isa Abdulsalami Ahovi, Jos
The proposed increase in electricity tariff has unsettled consumers in Plateau State even though the National Electricity Regulatory Commission (NERC) has refuted the report that a hike was imminent. Many residents who spoke on the issue described the proposed increment as inhuman, stating that the current metring and supply status do not warrant such.

A public affairs analyst in Jos, Mr. Ishaku Shoms, told The Guardian that metring was already a failure because some of the prepaid metres overbill consumers, adding that the marketers were aware of the development.Shoms revealed also that the marketers do not read analogue metres but give consumers estimated billing, which is always very, very high.

According to him, power supply in the state has been very epileptic, noting that residents enjoyed relatively stable supply during the yuletide period.
“But after Christmas and as we entered the New Year, we started experiencing epileptic supply. They would give light for two hours and take it for about four hours.“If you are supplied service cables and they get spoilt, they will tell the residents to contribute money to replace them. I am a victim. In some areas where the transformers got spoilt, consumers remained in darkness until residents contributed money before they were repaired. If you build a new house, you must buy poles by yourself to be connected,” he said.

Shoms dubbed the proposed tariff increment as anti-people. “The hike is going to increase the price of services rendered through power supply. For example, welders and other electrical workers will increase their charges thereby inflicting untold hardship on the people, especially now that the minimum wage has not been implemented.“When customers are not getting services for what they are paying for, and NERC is planning increment in tariff, to me, it is uncalled for,” Shoms argued.

Another resident, Mallam Yahaya Ozovehe Musa, lamented the inability of the DisCos to install prepaid metres for customers, saying “sometimes you may not see light for seven days in a month but the Disco will bring you an outrageous estimated bill when the month ends and there is nothing you can do,” he explained.He called for the supply of prepaid metres to all consumers in the state. “I see the planned increase in the electricity tariff as double cheating. One, there is no light. Why are you increasing the tariff?

“Assuming there is constant supply of electricity, you know what you are paying for. The suggestion of increment does not arise yet at all. They should make sure the power is steady then they can think of increasing the tariff. By so doing, the consumers will not even care because they know they are benefiting from it. Something you are not benefiting from and they are trying to increase the rate is of no use. To me, it’s just cheating.”An electrician in Jos, Mr. Shedrack Mbanasor, also said the government should compel the DISCOs to install pre-paid metres for consumers before contemplating any increment in tariff.

Mbanasor said: “I am an electrician. Let them share the metres. If they can do that, then they should forge ahead and then we will know what to do. They should share the metres because you can control it. If you have the metre, you can decide to use it when you want and switch it off when you like. You are controlling it by yourself. So, increasing this tariff now, I think it is not a welcome idea.”

‘To Tolerate Increase Is To Reward Poor Performance’
From Charles Coffie Gyamfi, Abeokuta
In Ogun State, all those who spoke with The Guardian insisted that electricity in their areas was very poor. Therefore, they argued that it would be unfair to increase tariff under the present situation. Those who use electricity for their businesses lamented that poor power supply was affecting them adversely. Some of them said they don’t get light in their areas for more than three hours a day, saying the planned increment was not justified and that they would resist it.A businessman, Mr Kayode Obisanya, said “the electricity situation has not been okay in my area in Olomore, Abeokuta; we have been feeling the pinch so much.”

Obisanya further said: “Usually we don’t have electricity for more than three hours in a day and that happens in the midnight and this has brought everything to a standstill. Businesses no longer operate because there is no electricity and people are finding it difficult to cope with the situation.
“If the government should go on with the planned increment, we customers won’t pay; we will resist it in whatever way we can. Those in charge are bringing estimated bills and as such people are paying through their noses already. So, the government should not go on to increase the tariff because Nigerians cannot cope with it now.

“When the Federal Government gave the DisCos the power to distribute electricity in the country, we thought it was going to be efficient; we thought that power supply would be on the rise but they have disappointed us. They have failed us.“If the government really want to increase electricity tariff, they should make sure there is stable supply of electricity. The situation now is unbearable for consumers and we can’t tolerate any further increase for now.”

A cybercafé operator in Oke Ilewo area of Abeokuta, Lateef Omole, said poor power supply has been the major challenge since he established the business.
“Everyday I burn petrol to run the business, which is bad. And as you can see, I don’t have a metre; all they do is to bring bills which most times are unbearable as I also buy petrol.“This planned increment will only cripple businesses as it is not favourable to the consumers. It will not bring anything good, as electricity supply has not improved for years. So, I will say the government should abort this plan if they have the consumers at heart,” he said.

‘Power Sector Woes Require Holistic Approach Not Tariff Hike’
By Sony Neme, Asaba
The proposed hike in electricity tariff by the Federal Government has drawn the ire of residents of Delta State as most parts of the oil-rich state, aside from a few towns, have endured epileptic supply all year round.Residents who spoke with The Guardian viewed the idea of tariff hike as unjustifiable, arguing that the services of the DisCos were nothing to write home about. For the 2015 All Progressives Congress (APC) deputy governorship candidate in the state, Chief Vanderpuye Abanum, “there is absolutely no justification for any increase in tariff.

“Power supply is epileptic and households most times do without electricity for days; and when power comes it may not last beyond an hour or two. Sometimes, the wattage is so low that to avoid damaging your household equipment one had better leave the generators working,” he added. The retired Central Bank of Nigeria (CBN) Director insisted that government should ensure that electricity supply was optimal and consistent before entertaining any hike.

“DisCos should provide metres and stop the rampant application of “estimated bills” and bulk charges billing systems. The current approaches to power distribution and billing is fraught with fraud and does not justify any increase whatsoever,” he noted. A chieftain of the Pharmaceutical Society of Nigeria, Pharm. Paul Enebeli, said the power sector reform in Nigeria was a big scam. According to him, “it was designed to fail; it is a big rip-off and we are all victims. If we had a patriotic National Assembly, a thorough investigation, not the type done in the past, into the scam is overdue so that those involved in this national calamity would be fished out and duly punished.” 

Enebeli, a delegate to the 2014 National Confab, added: “Discussing our electricity quagmire in bits and pieces will be counter productive.  I recommend a holistic approach. At 60, Nigeria is still talking about national grid.  
“My Ndosimili people generate over 460MW of electricity at Okpai. It is taken into the national grid while the Ndosimili people and its environs remain in perpetual darkness. This is man’s inhumanity to man. Nigeria should grow up.”

In the view of a leader of Delta State chapter of the APC, Dr. Leroy Edozien, increase in tariff would not translate to improved supply. He said: “My local Disco, the Benin Electricity Distribution Company (BEDC), is believed to be the least performing Disco in the country and its services the least developed of the 36 state capitals. 

“While the problem of inadequate electricity supply is a nationwide one, it is particularly bad in Asaba. This is due to a combination of the operational inefficiency of BEDC, the lack of functioning electricity distribution infrastructure in our area and other systemic factors. The increase in tariff will not, on its own, eliminate these factors.

“The root cause of the proposed increase in tariff is not inflation, but the under-capitalisation of the DisCos. We are continuing to pay the price for the acts of economic sabotage perpetrated when the generation and distribution sectors were privatised. Until that is addressed, we shall be groping in the dark. We need massive injection of capital into the companies.”

EEDC Is Ripping Us Off, Lament Anambra Consumers
From Uzoma Nzeagwu and Osiberoha Osibe (Awka)
In Anambra State, the chairman, Non-Academic Staff Union of Universities (NASU), Nnamdi Azikiwe University Chapter, Awka, Chukwugozie Ikegwulu, condemned the proposed hike, saying it was uncalled for.

According to him, the proposed policy was coming at a very wrong time, stressing that the nation’s economy was in shambles. “Power supply is so epileptic, not constant or even none at all in Anambra. The DisCos are out to dupe the public. Many areas in the Awka Capital Territory are still on estimated billing, which to say the least is a conduit pipe. The Enugu Electricity Distribution Company (EEDC) will not give power to consumers, but in most cases send out outrageous bills to people. To get the EEDC metre is like the camel passing through the eye of a needle due to bureaucracy and other bottlenecks.”

Ikegwulu added: “In Amansea in Awka North local council, there is nothing like prepaid metres in residential homes and people are given estimated bills. Meanwhile, many landlords have requested for pre-paid metres, which they are yet to receive. This planned hike in tariff is not justified; it is callous. Consumers are grumbling and complaining over the old tariff, yet there are plans to increase. Most people are jobless, suffering from high cost of living, economic downturn and managing to survive. In my opinion government is out to increase their sufferings, indicating that government is insensitive to the plight of citizens.”

Also commenting, an industrialist in Nnewi, Amechi Okeke, said the proposed hike was not welcome because it would further impoverish consumers of electricity in the country.He said: “Nigerians presently are undergoing serious economic hardship, much suffering and living from hand to mouth. Many Nigerians are living below poverty level. I strongly caution against any attempt to put Nigerians into further hardship. Considering the epileptic power supply or in most cases unavailability of supply, the proposed hike is unjustified.

“In my Nibo community where the then National Electric Power Authority (NEPA) sited one of their stations, which services Awka, Agulu and Ekwulobia, among others, we hardly enjoy six hours of electricity per day. EEDC in my area is a colossal failure.” Other residents who spoke with The Guardian lamented the hardship that has been further imposed on them by the EEDC following its efforts to migrate consumers on stand-alone metres to its integrated billing system.

A consumer, who identified himself as Mr. Nkwocha, lamented that he was given bills amounting to about N85,000 when the transformer supplying electricity in his area was damaged for over one year. Another consumer, who also gave his name as Ezeozue, said: “I opted for a new metre which is N38,000 for a single phase metre or  N70,000 for a three-phase metre. After filing the form, I was asked to go, as EEDC would communicate me. As it stands now, I have paid almost 50 per cent of the new metre to have the connection and then start using the light, but I don’t know when I would have light.

“I opted for this because estimated billing is the worst form of billing. I have been on it and changed when my analogue metre was stolen and EEDC started billing me N8,000 monthly as against N800 I was paying before.” He alleged that the move by the EEDC was meant to introduce a faster metring method that would make the company to break even.Ezeozue added: “When prepaid metring was started, a unit was between N4.00 and N8.00 and the tariff rate I had as at December 2018 was N30.93 kobo. Now, there is plan to hike the tariff. Despite the denial, the truth is that they want to increase the electricity consumption bill.”

We Are Already Paying Much, Say Ibadan Residents
From Rotimi Agboluaje, Ibadan
Ibadan Electricity Distribution Company (IBEDC) with its headquarters in Ibadan has its franchise area covering Kwara, Ogun, Osun and Oyo states. The company also covers some parts of Ekiti, Kogi and Niger states with 22 business hubs. Before the news of the proposed tariff hike broke a few days ago, many residents in Ibadan and its environs believed they were just paying the electricity company for power they did not supply to them.

Thus, the news of the tariff increase enraged many residents who said the Federal Government was out to impoverish the people despite the fact that power outage had become a culture in the state.A resident, who is into events management in Bodija area of Ibadan, Mrs. Toyin Oni said: “I don’t know what is wrong with the IBEDC. For days now, we have no light. Yet, they want to increase tariff. Anytime I hear a programme on radio, I will call to blast them. What is wrong with them? Is that what they should be talking about?”

A frozen foods seller in Aare area of Ibadan, Mrs. Olaitan Adediran, said the tariff was expensive already, stressing that it was unreasonable to increase it when power was not even available.“The tariff is expensive already despite the fact that supply is erratic. Why do they want to increase it when the light is not even constant? I pay N5,000 every month. If they increase it, how much would I be spending monthly? It is not welcome,” she said. A resident in Olodo in Egbeda local council of the state, Mrs. Ayodeni Aluko, said power supply in her locality was terrible, saying the development made her to opt for solar energy.

“When I was still using IBEDC, we hardly got light once in three months. I only use their power to iron my clothes now. I’m not in support of such increase. It’s unjustifiable to do that now. It will make Nigerians poorer. If it is becoming unbearable with the planned tariff increase, I will opt out completely,” she said.

Reacting to the issue, the Director, Centre for Petroleum, Energy Economics and Law (CPEEL), University of Ibadan, Ibadan, Prof. Adeola Adenikinju, bemoaned the power supply situation in the country, but noted that increasing the tariff was not the solution. He said: “As an economist, we know that pricing is very important. Tariff is very important. If we want to attract investments, then the price must be right. If the price is below what is called the equilibrium price, you are going to have supply lower than demand. You are going to have excess demand, if your price is not right. You won’t be able to attract adequate suppliers into the market. Two, the existing producers would not be producing at what is optimum because they are not able to cover their cost. Therefore, the system will not be able to be at an optimum level. So, price is very important.

“In the case of electricity in Nigeria, price is necessary but it’s not a sufficient condition. While it is important, it will not solve the problem of the power sector. Also, it shouldn’t be a way by which inefficiency in the system will be transferred to consumers. So, solving the energy or electricity problem in Nigeria has to be a holistic thing that will require efforts on the GenCos side, transmission side, DisCos side, the consumer side, the NERC and even gas suppliers. So, everybody has a role to play.” 

He added: “Now, if you increase the price, one of the issues why you have economic losses currently is because of inadequate supply of prepaid metres. The idea of having prepaid metres is to have what people actually consume and to introduce efficiency to the system. When you are billed based on your consumption, the tendency is that you will want to be efficient. When you are not at home, you switch off your light.

“Now, the DisCos are not investing in those metres.  We have a higher proportion of consumers that are still on the estimated billing system. At times, the estimated billing is not correlated with consumption. If you charge people too high, they will find a way of negotiating with those who are coming and find the way of cutting the system because they feel that they are being cheated. So, there is a need to actually get consumers metred.”

Imo Residents May Protest Against Proposed Tariff Hike
From Charles Ogugbuaja, Owerri
In Imo State, residents have resolved to slug it out with the Enugu Electricity Distribution Company (EEDC) over the planned hike in electricity tariff, saying there was no justification for that.They lamented that the company has been ripping them off through estimated billing, wondering why it has failed to install prepaid metres for consumers.

An accountancy graduate, Ebere Nwosu, who established a shop along Christ Church Road, Owerri, after looking for a job without success, told The Guardian that the issue of estimated billing should be looked into before any increment in tariff should be contemplated. “Can you imagine that the EEDC has been billing me N25,000 here based on estimation. This is just a one-room shop. It is outrageous. Now, they want to increase it again. We will not take it. This is dead on arrival. We, the consumers, will resist the increase,” she said. Although another consumer, Amaka Onyenze, who sells drinks, is on the prepaid metring system, she threatened to resort to generator or solar power if the planned hike in tariff is implemented.

“I have heard that the EEDC people want to increase their bill. This cannot work. How many times do they supply us with electricity that they are planning to increase our bill in April. We are going to reject that. I will also resort to alternative means, such as solar power or generator. This is unthinkable,” she said. The Guardian also gathered that many consumers of electricity in Owerri allegedly do not pay over poor supply and alleged outrageous estimated billing. There were also fears that residents may protest against the hike in the coming days.

‘Consumers Will Pay If They Are Properly Billed’
From Agosi Todo, Calabar
Residents of Cross River State have condemned the proposed hike in electricity tariff. They lamented the epileptic power supply in the state, calling for an overhaul of the sector rather than increasing tariff, which they noted, would add to the sufferings of the people.In Calabar, a resident, Chris Njoku, said he had not had light for over a year now, explaining that Nigerians were not afraid of paying the proposed tariff if consumers enjoy stable power supply.

He said: “Nigerians are not afraid of paying bills; our problem is not increasing the tariff for power. If MTN increases their tariff, people will still pay as long as they get the service they need; the same thing goes with the power sector. The problem of the people is where is this power? If people start getting it they will pay.

“Telling us that you want to increase the tariff makes no sense to any reasonable Nigerian. There is nowhere you will go to in this country and tell them you want to increase tariff and they will be happy with you. I am not happy and I don’t think any reasonable Nigerian is happy about it because we need to see the power first. They need to convince us that we are going to get it better than what we are having now.

“In my area in Atimbo, power has been dismally poor. We have several times gone to the head office in Calabar to complain because we have not had light for over a year now. Last year was quite terrible. The light got bad on December 25, 2018, and they repaired and brought the transformer back one month after. A month later, it got bad again and since then till now, we have not had power. Throughout 2019, we had power for only one month and it was not just in my area in Atimbo. In many areas in Calabar metropolis, power supply is very poor.”

Speaking on the issue of estimated billing, Njoku condemned it, saying it made no sense. “There was a time they billed my compound N100,000. The landlord just shared it to the tenants and the distribution company will come and tell you to just pay something. It makes no sense,” he said.Another resident, Mr. Martin Anyafulu, said consumers would be willing to pay their bills if they are charged according to what they consumed.He said: “Power supply is epileptic and how do we now believe that when you increase tariff, your performance will also increase? What justifies the demand for increase in tariff? Now, if the problem is that they are not paying, they should ask themselves, why are the consumers not paying? What they do is to look at a building and impose a bill on them. If they can reduce the tariff and a proper assessment of consumption of consumers is done, I tell you, they will make more money,” he said.