Since November 1, 2013 when the Federal Government partially privatised the successor companies that emerged from the former Power Holding Company (PHCN), Nigerians have been going through mixed experiences in their ability to access electricity power supply. The common trend that runs through the entire story chain is that Nigerians have not seen the promise. Succour has not come and the new companies have not changed from what the consumers used to get in the hands of PHCN. Vanguard Conference Hall is focusing on the power sector as part of a comprehensive special report on this sector.
What is the energy map of Nigeria today?
Comrade Joe Ajearo: Before now, we as unionists have tried to make presentations on how to diversify our source of energy. As you know, we have wind, hydro, thermal, as well as bio energy sources, but it appears that government is only interested in gas as the main source of energy supply for electricity generation in the country .
We visited the then military head of state, Ibrahim Babangida, to advise him to work on Mambilla Plateau Hydropower and you know fully well that Mambilla alone has the capacity to give us between 3,600megawatts or more which is higher than the whole power generated as at today. We equally talked about Zungeru, another hydro station, that has the capacity to generate between 900 to 1,000 megawatts. That two plants would have given us between 4,000 to 5,000megawatts.
The then government of IBB took feasibility studies and it ended there. We equally made presentations in Enugu, Benue and Kogi axis where we have large deposit of coal. All over the world, Coal power plant stations contribute about 40 percent of power generated for electricity. Though we should explore that, but as we discuss now, I don’t think anything has happened. I am not sure that even the new investors have the licence to explore or mine coal in those places.
So, if you ask me, the concentration on gas energy source alone is part of the problem we have in the country because we have close to 80 percent of the power plants that are dependent on gas. Under any normal circumstances, gas should be an emergency power source. Our national security will be in jeopardy once gas lines are damaged.
The new policy, if there is any, is not even looking in that direction. We are only managing the gas and hydro stations . These are what contributed to what we are experiencing now. The power sector and electricity generation in Nigeria is in shambles. From the time Prof. Bath Nnaji was in office, they fired both the gas and hydro stations at the same time, just for us to create the impression that electricity power supply in Nigeria has improved to 4,000megawatts.
There was no time to save enough water for the dry season and when the supply of the gas plants was breached, the system went down drastically; there is no magic about it.
Now, if somebody is bringing in the theory of vandalism, I don’t think it is new because it has been there and the way we police the oil pipelines, I think we should as well police the gas pipeline.
However, the issue of vandalism becomes difficult when you now establish political power stations. Now, if the source of gas is in Bayelsa State for instance, why must you build a gas plant in Lagos or Sokoto State. After this, you build network of pipelines that will carry the gas to hundreds of kilometers where the power plants are located. It does not make economic sense.
What you don’t understand is that even if you build it in the state where the source of power is, the same moment the person from my state is getting supply is when the person from the other state is getting his own supply. Some of these things are caused by political considerations; it is not as if we don’t have all these other sources of energy. But if we start today, we can still go far, but I think an average period to build a power plant is about four years and we should be ready for it. But it is better that we start now than to keep quiet and lament about the power situation.
Moderator: Sir, you mentioned something about policy that I will like to take as a follow up, the issue of new policy driving our energy sector if any. Where we are now ? We started with having the energy power sector reforms and up till now, nobody knows the policy framework that guides the process of electricity generation, energy use and energy conservation because if you take out a country’s energy supply, it will disruption the national security. What is our frequency in this direction?
Engineer Kola Balogun: I belong to the downstream in the power sector and I will like to lay emphasis on my jurisdiction. Today if you are considering enormous capital that is required in building a power plant, the end result is to be able to collect revenue. That is substantially to pay back what have been invested in the upstream.
It has been an issue ever since that we are not generating enough electricity, neither do we distribute enough electricity to the entire downstream. Equally, we are not collecting enough revenue to negate what has been invested in the upstream of the power sector. This is the main reason why we introduced the issue of prepaid meters. We felt that if we introduce the prepaid meters to the consumers, we would be able to have sufficient funds to plan because there will be more money for generation.
We introduced the prepaid meter and we have been sustaining it for quite some time now, but you will discover that the meter is still having problems in terms of distribution to consumers. If you take a closer look, you will notice that the collection platform in which consumers pay all their bills is not robust enough. We don’t have an easy way for electricity consumers to pay their bills; an easy way for consumers to recharge their meter and that is enough to actually put some of them into thinking of by-passing payment of bills.
If I have the money but I don’t have an easy means of paying electricity bill and somebody in the neighborhood has been having little electricity supply, then ask yourself, why will I not by-pass payment of bill? So, we need a very healthy downstream platform. We need revenue efficiency collection platform to ensure a seamless way of recharging the meters or payment for electricity bill using postpaid system. I believe that every consumer must be metered, it is not proper for any distribution company to give consumers estimated electricity bills.
With this new changes on the power sector, it is now possible for consumers to sue power distribution companies for giving them estimated bills. That is why it is mandatory for all the new DISCOs to ensure that all electricity consumers are metered, be it pre-paid or post-paid and also create a very seamless platform for them to pay their electricity bills or to recharge their meter.
I don’t see any reason why any consumers cannot go to an ATM machine and recharge cards for their meters. The inefficiency in revenue collection method makes it difficult for the investors to recoup their investment in the upstream.
We also have problem of collecting data, which will create consumer data base in the power sector. We need these infrastructures so that whatever investment that is made in the upstream will guarantee its return in profit. But in a situation where we have leakages everywhere in terms of payment of electricity bills, in terms of recharging electricity, there will be loss of revenue.
If the little electricity we are generating is well articulated and well channeled, some people will still have electricity. The little electricity we have is not well channeled and accounted for. These are the major challenges facing the electricity sector.
The new owners need to come together because somebody has to be the driver. Either the ministry of power or the regulator, (Nigeria Electricity Regulatory Commission, NERC, needs to come up and drive the sector in the right direction and create a template of executing the reform act. Somebody needs to drive it, somebody needs to process it and decide that this thing needs to be successful. If we can’t get it right, then everybody’s work will be in vain.
Michael Faloseyi: (Representative of NERC Chairman, Dr. Sam Amadi), I will like to talk on the issue raised earlier concerning energy policy. With every sense of modesty, it is not proper to say that we don’t have energy policy.
May be, before 2005, that will be right and it will be reflective of what was on ground then. The perspective to it will be whether we are implementing that policy the way it should be or not. May be there is a counter perspective to what we have on ground and it will be unfortunate if out 170 million people, there is a policy on ground, but there are no counter perspectives.
The issue is whether what we have on ground is addressing our problem or not. There could be a perspective and that will enrich the ability of our people to criticise that policy, to punctuate it, and come out with a better idea that will be a better way to move forward.
In 2005, during president Obasanjo’s administration, there was a committee set up through which the Power Sector Reform Act was produced. President Goodluck Jonathan came up with an Power road map. All these were built up from 2005 to the stage that we are today. Just as I said earlier, if there are no counter perspectives, it is unfortunate for us. This means that there will be no better idea with which to arrive at a good or desirable destination for us.
So, the issue is ‘what do we have? It is proper for labour unions to have another perspective on what we have on ground. It is proper for the private investors to have another perspective, even the government too can have its own perspective. So, it is a crossbred of ideas that will take us to where we should be because it is obvious that we are in a parlous situation concerning our power sector.
Whatever we have now, if you throw it to Bayelsa State, which has the least population in the country, it will take it. Let’s say if the whole of Apapa takes the 4,000megawatts that we celebrating now, by the time all the companies there put on their appliances, it will take the whole megawatts, it will not even be enough for the entire Lagos.
Joe Ajearo: I raised the issue of electricity power policy and I will like to respond to what he has said.
From what he said, what is the policy because what we are doing in this Conference Hall is to help Nigeria. It is not an issue of whether it is counter view or alternative one which he agreed is needed for us to get to our destination.
From what he said now, we can see that from 2005 till now, Nigeria has not had any electricity or energy policy?
It is important that we ask that question too. If it is the Power Sector Reform Act that we call policy, I will tell you that it is a World Bank’s Privatisation Policy which is going round the whole world and I will say here that the Nigeria Power Sector Reform Act was not a home grown product of what the stakeholders sat down to look at.
I am saying on good authority that the same document that was given to Lesotho on electricity reform was what was brought to us and wherever you see Lesotho, they changed it to Nigeria.
I want to know whether that is the policy. And if that is the the policy that say that every six months, you have one power station completed and our power station moves from one to two or whatever. That was the reason I raised this issue. It is not as if somebody wants to cast aspersions or so.
So, if we have a policy, how come it has not acted as a guide us and since it has not, can we review the policy? Those are the issues.
If our national policy on electricity is available, is there room for us to make input from time to time? The Power Sector Reform Act was the framework for privatising electricity generation and supply, just as they have privatised water, education, telecommunication and others. So, that is not a concrete policy on electricity power sector.
Even if you look at privatisation itself, you have to consider the objectives of the policy and ask the questions: where are we supposed to be by the end of 2014? Are we supposed to go down from 3,000 megawatts or move higher than that? Those are the areas I looked at when I mentioned the issue of policy on the electricity power sector.
There used to be 10 years development plan. Within that 10 years, you look at moving from XX megawatts to XX megawatts. That is what I meant. Even under the privatisation policy, you still have a policy that every month or year, there will be an installment increase in the electricity power supply in the country, until we get to a desired level. That is what I mean, not because we have changed ownership in power sector. Changing ownership is not a policy that will make us arrive at our desired destination.
Mr. Charles Ilofulunwa: In addition to the Power Sector Reform Act, government is repeating the mistake of the past and that is why they are trying to introduce what is called renewable energy, which should be able to add to what we have in respect of increment of megawatts.
It is quite sad that a country like South Africa with a population of not up to 70 million generates up to 50,000 megawatts of electricity. So, you can imagine the huge gap; 50,0000 megawatts and we are talking about 3,000MWs. It is ridiculous that as big as we are, Nigeria is still debating about generating between 3,000 and 4,000 megawatts. This cannot even be mentioned within the Comity of Nations.
That is why I laugh whenever we call ourselves ‘The giant of Africa’ because we are only deceiving ourselves. That is the simple truth and that is why I said government is realising their mistakes and the way to go now is to delve into renewable energy. They should be able to make a policy that will enable people in the rural areas to have electricity, constant power without necessarily depending on our normal power supply through the national grid.
Once they introduce the renewable energy, it means that Ajegunle area of Lagos State will have sufficient power using renewable energy without waiting for their normal electricity that comes from the national grid.
This issue of disruption of power supply as a result of damage on gas pipeline will not be there. So, those people using renewable energy will not have disruption in their power supply because take it or leave, we have a long term planning for this to work.
Moderator: If we have an energy policy in place, we can have energy coming from gas, renewable energy and energy from coal. What capacity do those investing in power sector have? What technology do they have? Because I will not just put money there but I will put things in place that will help me recoup my investment. South Africa has left us behind and I don’t think there is anything we can do now to catch up with them in the next 10 years. If you don’t have a foundation to build a house, I don’t know how you can just get up and say that you have a house. Sir please take it from there.
George Etomi: My view is that we must empower Nigerians by making them more knowledgeable about how our power sector works because it is too mysterious for many of them today. Some of them go home, switch on their bulb and if there is no light, they turn on the generator if they can.
Nobody asks questions and if consumers don’t get empowered, the reforms that we are talking about will never come because the pressure to do something really comes from these consumers.
Look at the telecom sector that we are celebrating today; look at how empowered most Nigerians are now with the telecoms sector. The variety of options that we have and the ability to use sophisticated phones by an average Nigerian has has brought about empowerment.
I don’t want us to be too hard on ourselves because we are dealing with problems that predated us. Clearly, the planning was poor and it is not just in the power sector.
When I finished my Masters degree in 1979 and I came back from London, I flew into the Murtala Muhammed International Airport, I was walking 10 feet tall. I mean I felt so proud as a Nigerian. That edifice was way beyond anything you can find in South Africa at the time, even in Dubai that we all go and waste money today, not to talk of the rest of Africa. But for how many years now, apart from what we see going on today in the aviation rehabilitation work, not a cement block was added to the MMA, even passengers traffic has probably gone up considerably.
There has been no investment in the power sector power sector we are talking about in the last 30 years. We have one of the most healthy power systems when it started. How many of you here today know that when Lagos was planned, it was actually planned for an underground power cabling at the time.
If we had just kept up with that, we would have had a cleaner Lagos that is very well powered. But what happened? No investment, total neglect, surface cables started coming out with what have you now. So, it has been years of negligence on our part as Nigerians. I am not absolving myself; am not absolving the government, we are all in it, but I am optimistic that things will change.
“This privatisation that has taken place is the best thing that has happened to the power sector. Not everybody will agree with me, but I will tell people to point at the telecoms sector. What we now need to do is to have a clear policy direction.”
In any privatisation, what you must have in mind is that powers of the minister to do anything should be curtailed and transferred to the regulator because they are the professionals that can drive the sector. The role of the minister should be limited to policy. That is what is going on in the telecoms sector. That is why if I ask anyone of you who the minister of communication is, everyone will be cracking his/her head. Unlike before where everybody needed to know the minister to do one or two things, but now his role is policy making and monitoring.
I am assuming that it is what will happen in the electricity power sector. So, let us not just lose hope. Let’s make sure that policies in the power sector are properly implemented. Let’s get to the issue of implementation. We damn ourselves so much in this country when we are struggling over 3,000 megawatts when countries that are less endowed are giving themselves more reason to smile.
I went to Ghana sometime ago and for a week, there was no outage. Go to Kenya, it is the same thing. In the next five years, a lot of these companies will go public so that the public will have the opportunity to become co-owners. It is a matter we taking our destiny into our hands in the power sector.
So as many ideas forum like this can help articulate will do a lot of good. The little time we have had with Eko DISCO has been very revealing with as much obstacles as we see. Our determination is even more to succeed. We are dealing with a mixture of policy neglect, delinquency, corruption and a whole lot of obstacles, that pulls us back, but our singular determination is to crack it.
I have lived in a generation that saw banking in Nigeria as tough; it will never change. You will go to the bank and collect tally number, go and do whatever business you want do for the day, then come back in the afternoon. If you are lucky, it might be your turn. Some even bribe to have their turn but today, Nigerian banking is in the forefront of any banking anywhere in the world. We have revolutionised the entire west coast and it was done by Nigerian bankers, young Nigerian men and women, so it is in our hands now. We must make power sector reform work!
Thank God for people like you in Vanguard; this is the beginning of empowering Nigerians to understand that a consumer who refuses to pay for the electricity he consumes, or the one who connives with someone in PHCN to do a wrong thing is short changing the person who is doing the right thing. The good people always subsidise bad people.
Today, we are talking about oil theft, but there is electricity theft, but who is doing it? Each time it happens, you and I who wake up in the morning and want to do things the right way, because the law says we should do them are the ones subsidising those bad people who disobey the law.
That electricity that is sabotaged for you not to get cheap electricity, you pay for it through diesel. Nigerians don’t calculate that. To put it in perspective, anytime you burn diesel, you are spending the equivalent of N90 per kilowatt of electricity; that is the charge. Normally, electricity comes out between N11 and N14, so you can see the band in which people play (between N11 and N90). I wish the benefit is going to Nigerians, but it is not.
It is going to a cartel that will ensure that we live or die in darkness as long as they are making their money.
So, we must break that circle! I tell most of my colleagues today that the investment is massive in electricity but I am sure Nigerians are willing to pay a bit more in getting steady power supply.
Who creates jobs in Nigeria? It is the SMEs. Those are the ones that reel most under this oppressive power situation. So, this is a clarion call. We must all align and I take his point that people will start to sue and we are aware. So, the days in which the government gives cover for PHCN officials will not happen because if a client gets electrocuted, the investors will be held responsible for it. We will slowly get there. So, I don’t want us to be too hard on ourselves.
Yes it will take a long time to achieve this but it is good that we start this because whatever we do, our children will either benefit or suffer as a result. Those of us who felt that Nigeria was on a take-off from the 60s, 70s and 80s, we are now in 20s, but trust me, few years from now, we will fix power. Power is at the basic of everything we do; even the telecom sector depends on power. Once we fix it, trust me, Nigeria will be on the forward march.
Joe Ajearo: The point I want to make is in respect of what he said about telecommunication sector. For the purpose of this conference, I want to state that NITEL has not been privatised even as we speak now. What happened was a kind of deregulation of the sector, which made new players to come in. The deregulation of the telecom sector brought in players like Glo, MTN, Airtel and others in the field to compete.
When this issue came up in the power sector, some of us insisted that all the players that showed interest should come with proven evidence of their capability to set up their own infrastructure. You will recall that from 2005 till date, some investors were given licence to operate power stations. About 25 companies were licensed and as at today, none of them has generated one watt. I am happy that the NERC is represented in this conference.
The same people that said that PHCN was obsolete were the ones that lined up to buy the meager 2,500 megawatts or the obsolete PHCN. It is good for us to understand that we are still on that 2,500 megawatts even with the whole name given to it.
If you look at the electronic media sector, government did not have to sell Radio Nigeria or NTA before Ray Power, AIT or Channels were allowed to came on board. If you do that, you will short change the people. That is to say transferring public monopoly to private monopoly. But in the case of the power sector, if there was three or four companies that were already generating 4,000megawatts, it would have made a difference in terms of promoting competition and giving the consumers alternatives.
The power sector is different and I want to say that I have never seen any country that does not have base power. The South Africa we are mentioning is entirely government generated. In the United States of America, which is the center of capitalism, 250,000megawatts of electricity is generated by the government as base power. This is important for national security.
If the investors in the power sector come up to say there won’t be power in the US, that 250,000megawatts would be there for the critical sectors of the economy and the society to operate. It is not a situation where you will say that the American government is not interested. The other segments of the society such as the municipal governments, state governments and privates investors contribute to the national target of one million megawatts of electricity in the United State of America. Now what is Nigeria electricity base power?
I was among the people that suggested that 4,000mw of electricity would not be enough for us to hold firmly. Eko Electricity Distribution Company for instance, can do well. Like what someone said here, even what is currently being generated can be consumed by Lagos metropolis alone. This is a virgin market.
With all the somersault, we created 18 successor companies around 3,000 megawatts and handed over the same 3,000megawatts to private investors and we expect magic to happen. If we expect magic on the same 3,000megawatts, we are not being fair to the people that have taken over.
I was among the people that said that there should be a bridge between availability and affordability. That is to say, before privatisation, we should have ensured that there is availability of power so that the people coming in should have something to manage.
The challenges they are facing have been there. So, what effort was made to address these challenges before they arrived? The new investors have more challenges, especially in recovering their debts. Before now, we can say that the the power company, PHCN, was giving us crazy bills and we kept mute and handed over everything to God. But now, if they do that, people will revolt.
Confronting the issue of prepaid meter.
Now that brings us to the issue of pre-paid meters. How can a country privatise its power sector without having at least four to five companies that manufacture and supply pre-paid meters. We should have made sure that these things are available before we embark on privatisation of the power sector to help the new investors to recoup their money.
Now, if they had four to five companies that manufacture pre-paid meters, as well as repair them, that would generate employment. Consumers would be able to pay their correct bills, they would be assured that if they are not satisfied with their power supplier, they could switch to another provider, but now it is private monopoly.
These are some of the things that I mentioned, not because we want to be hard on our nation, but we have to tell ourselves some home truths.
George Etomi: He is correct but bear in mind that government still owns 40 percent stake in the power sector. The privatisation was only done for 60 percent and in five years, they are expected to go public. All the issues you raised are true. The thing is that government is the most inefficient vehicle to get a lot of these things done.
So, let us start now that we have moved them to a point so that we can begin to empower ourselves to bring about change.
Secondly, each of these companies is committed within the next five years to invest at least $250 million. That is going to make a significant difference. Thirdly, you will notice that there is significant interest in power investment worldwide in Nigeria now. This is because the Electricity Reform Act has created the enabling environment for investors to come into the country.
You talked about telecom sector, that one was virgin and the other was not. There was several attempts to privatise NITEL, but each time they put a bate and the people went in there, they see a different thing. Because power is a utility, it could not have gone the same way telecoms did.
What you want to look at is the overall concept. If we use all our oil money to put into power, it won’t be enough. It is investment funds worldwide that makes the difference because investors are looking for the best places to put their money. So, what we should be doing is creating the enabling environment for investment to come in.
The bulk of investment in telecoms far outstrip whatever NITEL spent throughout its 50 years of existence before it went into extinction. Investment funds are coming from outside. What we want to see is a similar thing in power where new and better jobs will be created, most of these companies will be modernised, youths will become more vibrant and the metering business will flourish.
Talking about metering, there is no way it is not going to happen. I know they paid lip service to it in the past because among the things, corruption did not make it to happen, but now it is going to happen because people are going to distribute bills. So, some of these things are true, what we need to do is take a look at the what the future holds for us and understand that our destiny is now in our hands. It is left for us to play the ball the correct way.
Engr. Kola Balogun (CEO MOMAS): I will like to make a distinct point about what comrade Joe Ajearo mentioned. Enough of all these stories that we have been telling ourselves, let us dissect the main issue. Firstly, why has government not invested in hydro? We have the Mambila free energy for us and it is hydro. If we have all these hydro power plants working, it will be sufficient for us. It is not going to be capital intensive like that of the gas.
When the Niger Delta crisis happened, they cut off gas supply and we had nothing left. Why have we not re-invested in our transmission network? Why have we not done segregation in our off-grid system? Why can’t a state generate its own electricity, supply to the state before adding it to the national grid?
Moderator: Electricity is still on the exclusive list in the constitution……
Engr. Kola Balogun: That is part of the problem. We should empower some states , let them generate, feed their states and then feed the national grid. So, we have to open up this issue one after the other to look at areas we can address.
Michael Faloseye (NERC): Let me add this. Before 2012, It would be right for you to say that electricity is the exclusive preserve of the Federal Government. But now, we have the regulation that permits other states to generate their own electricity. That is why you can see what Fashola is doing in Lagos, a lot of power plants are coming up. Even before him, Tinubu tried his hand on some of them although he got his finger burnt. River State is doing something similar.
We have what is called IEDN; we have regulation on captive generation. Captive generation allows these distribution companies to enhance their supply in a particular location. Take for instance, if there is no supply across this river and Ikeja or Eko which has the franchise in this area says they cannot supply, people residing in the area can come together and go for a new supplier.
The only thing they have to do is to sit down with the person that has franchise in the area and ask how they can connect from this point to the next? How much are we going to pay for using your wire to connect from this point to the next? They will work out the economics, approach the regulator and if the economics works out fine and there is a ready market, then it is fine and good.
Moderator: Etomi made a point which is what Nigerians are suffering. 99 percent of Nigerians are ignorant of what their right is as regards electricity use. Whatever bill is given to you, you can’t contest it rather you just pay. In any case, if you are going to contest it, it is the man that gave you the bill that you will still go and meet. It is like reporting yourself to a police that arrested you in the first place.
There is no escape route for you, they are holding you by the jugular. I have been told that the pre-paid meter has been stopped and that the entire system has gone back to the old NEPA system, old NEPA technology, and old NEPA tactics of collecting revenue. Like what you said about leakages, if I recharge my electricity the way I recharge my phones, I will know what I consume. If I use DSTV and I run out of credit, they will cut me off, but electricity in Nigeria is that you are paying for what you are not using.
So, we have issues to find out from the regulators. Have you taken the consumers into confidence in the sense that we have to defend the right of consumers? We should be able to hold consumer’s forum and let them know what their rights are. You talked about going to court, it is when you know your right that you can go to court, if you don’t know, how then will you go to court.
Even as we talk today, Nigeria still funds electricity companies. So, you begin to ask question like, why are we still using public fund to support private investors. Now that you are telling me that government still has about 40 percent of the business, we need to get a lot from the regulatory body because they are the eyes of the government. They are the ones that will set the limit an operator cannot go.
I want you to really break it down for us, where do we really stand as consumers of electricity and those who are in this electricity business, to ensure that we have electricity because it is a utility that we can no longer do without.
Michael Faloseyi: It will be simplistic for me to say that the responsibility of a regulator is to protect the customers. The responsibility of a regulator include that and much more, such as ability to read in between the lines, ability to ask question and ability to do cost benefit analysis.
For instance, if someone says he wants to build a power plant, I should be able as a regulator to read between the line. What is the cost benefit analysis of it, what is the impact on the environment. Those are the responsibilities of a regulator.
Having said that, you talked about power consumer assemblies. Nigerians are becoming aware of it gradually just as the man from Eko DISCO said that we shouldn’t be too hard on ourselves.
We have been doing the same things for over 50 years and we are now talking about change, which is less than two month or let me limit it to the activities of the Commission for seven years.
Change is a gradual process and if you drive the people too hard, you will not be able to get a desirable result and if you run faster than your leg can take, you are likely going to collapse.
I mentioned the ability of an individual or resident association, local government or states government to generate their own electricity. If you check your energy page about two years back, you will see some headlines like state government urging the federal government to give them power.
Do a content analysis and check that report and ask yourself ‘When last did I see that headline? It will interest you to know that you will never find such headline again simply because they now know that it is their responsibility, that they also have a stake to generate electricity for their citizen.
Before now, what we used to have on ground is that you see a state governor who wants to grandstand, but because of the regulations that we have put in place it has been pushed back to them and they are now aware that they have a responsibility and even as a local government chairman, you can generate electricity for your people.
In South Africa, distribution of electricity as a matter of fact is a source of revenue for the government.
It is only in Nigeria that you find a local government chairman going to buy transformer with public fund and tell the community to meet PHCN to install whereas by the time PHCN was submitting its budget for the year, there was no budget to connect that community.
Meanwhile he or she has wasted public fund, he has not asked question as to how he can recoup the money he has spent on the transformer. At the end of the day, somebody in the community will take away the transformer.
Last year, we talked about the issue of awareness on the side of consumer. Electricity power consumers are the set of people we need to empower, we need to get them to be aware of their right and responsibility. It is easy for us to say that government is bad, but it takes two to tangle. Sometimes, when I go on power consumer assembly, I used to tell people that it is very easy to say that PHCN staff are bad, but don’t forget that they are your uncles, aunty and if you accuse them of corruption, it takes two to tangle.
When they want to play such game, they will ask you how much you have and you will say N10,000. Then they will ask you ‘Do you want to pay? That is usually the first question. If you say you want to pay, am sure that worker will be scared of you but if the consumer asks for help, then it has taken two to tangle. At the end of the day, you will be at the receiving end.
So, we have a platform that is called ‘Power Consumer Assembly ‘ through which we have moved throughout the length and breadth of this country.
Last year (2013), we used to have at state government headquarter, but we discovered that perhaps we were talking above people’s head. It was then brought down to local government and we picked three local government in each of the geographical zones. Ogun State was picked in south west and I was at Ota, Ijebu-Ode, and I was also at Abeokuta.
So, it is a gradual process because we have started from state capital and now we have moved to local government, but you also need to know of the fact that what Nigerians need most is electricity. If you are telling them to pay their electricity bill and the power supply is not there, you even stand the risk of being stoned. Let us not deceive ourselves, electricity power supply is not readily available. So you don’t shout more than necessary, otherwise, you will become a nuisance to yourself and the people you are talking to.
The reality on ground is that we don’t have enough and anytime we have power, 10 other people are been disconnected. The fact of the matter is that we are moving gradually and just as I said earlier, it is good that we have a broader perspective, alternative and counter perspective of the way we are going so that whatever mistake we have made, we will be able to correct it and it will be better for us to listen to ourselves.
Mr. Charles Ilofulunwa: You did mention that some people were given licence to generate power and since 2005, they have been unable to do that. I think we need to view it from this angle, we have been having what is called policy inconsistency on the part of the federal government whereby one government will come up and initiate a policy that is mass-driven.
At the end of the day, another government will come and change everything without regards to the cost of what investors have put on ground as if that person has somewhere he brought the money to ‘dash’ the people of Nigeria.
You will discover that most foreigners who have the money are still watching to be sure of the direction government is going. People who were given licences to generate power are also still watching the body language of the government because they can give you licence to invest, then you will go and borrow money and mobilise your technical expert to come into Nigeria and invest.
The project may have gone about 60 percent and they will come up and say they don’t want to go toward that direction again.
They don’t have anything to help you recover what is on ground and it goes a long way to discourage potential foreign investors who have the technical expertise and money to get it done. Secondly, I think successive governments have failed to do what they are supposed to do. If they are using the same infrastructure in 1970s, 80s and 90s without putting into consideration the possibility of population explosion, it becomes a problem.
As at last census, we said there were 170 million Nigerians. 20 years after, we are still using the same power, the same infrastructure. So, there is no way the same capacity will still carry the same number of people. For the past 20 years or since the advent of this democracy, you will discovered that the level of economic activity in the country has expanded, so you can expect high level of energy consumption from the populace and there is no commensurate increase on ground to carry it.
That is why I am even suggesting to the new investors like Eko and Ikeja and those who bought generation and distribution companies to change the old infrastructure and put in the latest cutting edge technology that will go a long way to save lot of us and even capture the possibility of public expansion in the next ten years.
It is not enough for you to say that you are targeting 10,000megawatts of electricity without considering the potentials population expansion and huge economic expansion; all of them need to go together. Then on the issue of metering, I think we have to accuse the DISCOs for not doing enough. Dr. Sam Amadi of NERC came up with a wonderful policy called CAPMI where consumers are meant to pay for the meters in advance and unfortunately, I need to say that the DISCOs are not doing what they are meant to do.
They gave us licence to manufacture and import meters and make it available to Nigerians. We equally told them that we have the capacity to get it done but what when you get to the DISCOs, you will discover that the process of driving the scheme to the grass root to make sure that electricity consumers are metered is slow. They even told us that they don’t have the money that we should go ahead to do the sensitisation programme on our own. We said no and told them that they are closer to the people and that the people will listen to them more.
What we need to do is that since they have various business units in all the PHCN offices, they should go and do the jingles, encourage the people to make the payment and we will make the pre-paid meters available to them. We are not talking about analog meter, but prepaid meter. Analog meters should be phased out. Even the pre-paid meters we are talking about now is not what we should be talking about.
Smart meter, which is in vogue, has the capacity to measure the quantity of energy you consume and the time it was consumed. In the next five years, we should not be talking about prepaid meters, but smart meters, but the DISCOs are not doing enough and they have refused to sensitise the people.
George Etomi: It is important that we understand where we are all coming from. After independent, everything was working, from education to agriculture. In fact, everything was working because regions were competing to catch up with one another. Let’s just put things in perspective because we now have a window to put move things forward. Why on earth do I produce from Mambila or from wherever and I take it to the grid and somebody somewhere in the grid will determine what I get.
Some parts of Nigeria don’t pay electricity bill because they don’t have the money to pay but they have light and essentially those who are paying in other places are subsidising it. That is the system we have been running in Nigeria, but now we have a chance to break from it. One of the points I am hoping that we move to is the point where we will have captive generation and it is expanded to regional generation so that they can develop their electricity infrastructure and they will develop at their own pace.
Engr. Kola Balogun: The man from West Power and Gas has actually highlighted some of the points I wanted to make, but the most important thing that is actually derailing the process is still information gap. There is not enough information dissemination from the regulator, NERC. That is why I said earlier that somebody needs to uphold the reform, somebody needs to process and drive it.
NERC needs to drive it more and from my own judgment, they are not doing enough. Llet them stand up and drive the process like what NCC did in telecoms sector. They need to educate the entire populace about the business opportunity within the power sector. For instance, he made mention of somebody constructing a power distribution line in accordance with the distribution company. I have never heard it before, so these are the opportunities that some new millionaire will be able to invest in and get some return on investment.
So, they need to open up the business opportunities in the power sector. Theyalso need to possibly have a national programme that will educate the entire citizens and it should be a network programme. It should be live and everybody should have the opportunity to call so that we can interact on the national programme on the way forward.
My factory as at today has the capacity to produce 100,000 pre-paid meters in a month. I have a stock of pre-paid meters in my warehouse but I cannot sell because the new DISCOs are just waking up, trying to adjust to the reality on ground. They are not encouraging CAPMI, they probably don’t have sufficient fund now to actually say they want to buy meters in bulk and start distributing.
So, we are hoping that they will wake up and when there is need to intervene in some issues NERC should square up to the responsibility. For instance, DISCOs trying to stop the process of metering, or when a DISCOs is not willing to align with certain business ethic, NERC needs to intervene at every point; that is necessary. They need to come out more and let the public know that what they are doing to salvage the entire process.
Joe Ajearo: Let me respond to some of the points that have been raised here. It was mentioned that the new investors will invest $250 million for over five years. I want to say that I don’t think that is realistic because I am aware that they have started operations on debts and I have to say it again that the new investors started their operation on debts because they borrowed from banks and that is the major problem we are having now. Before they took off, they have started paying back, that is to say that they have started servicing their loans from the banks.
Moderator : They have increased electricity tariff, I have a case of a consumer who was billed N50,000.00, for the month of November alone even when she has been paying her bills in a duplex in Ago, Okota, in Lagos, which is purely a residential building.
Joe Ajearo continues: It is not official. NERC has never approved any tariff increase as we talk now. Now, the new investors borrowed money and they are using borrowed money to run their business, which means they are already in debt and they must finance the loan and to post profit is another issue. Now, you are saying that $250 million will be invested in the power sector. At what return on investment are these guys doing business that they will service their loan, make profit and invest this amount.
The situation you are seeing today is that the power situation is going down, transformers and other power infrastructure are going down.
About what the NERC representative said about companies that generate and distribute power, I don’t think it is a new development. The Nigeria Electricity Supply Company, NESCO, Jos, and I have my members there, has been in existence in Nigeria since 1929.
They generate and distribute power in Jos up till today before the birth of NERC. In fact, they were covering about two to three states before and they are still there today making their small profit with that customer base. It was on that background that we felt that people who were given licences could equally function even if it is 20megawatts or 50megawatts, we will add to what we have.
It is only when they have finished selling to their customers that they will now send to the national grid. Then, PHCN will pay them for the power they supply them.
So, I don’t think this is a new development and Nigerians should have followed suit by building more power plants. Some oil companies started to build power plants, but corruption came in along the line. Mobil and Agip generate and they sell to PHCN at N11 per kilowatt hour, while PHCN sells to customers to N4 per kilowatts hour.
The same thing is applicable to Aaron AES in Egbin. They generate about 220megawatt. Whether they generate or not, it was said that they had an international agreement that at the end of the month, PHCN must pay them. Even if they generate one megawatt, PHCN must pay them for the 220megawatts and PHCN pays them at N11 per kilowatt hour, while it sells at N6 per kilowatts hour after transmitting distributing and all other services.
They were there as generating companies with people that are highly connected that must force PHCN to buy the power at N11 and take N5 loss. So, that was the way PHCN was operating with these companies – Agip, Mobil, AES and so many other companies. It was easier then because PHCN could get gas from the gas companies and say they will pay since PHCN was government agency.
Now, if it is the private man that takes that gas from the gas company, he must pay them and still recoup his profit. The point I am trying to make is that there is much to be done for you to say that you are investing $250 million.
We can bet on this on this our programme now and monitor it and see how far they can go in investing this amount. They are not re-investing and if they are not re-investing, the little system that we have will be going down. Therefore, we must have a programme or plan that will allow them to continue to re-invest.
Nobody is talking about the transmission lines. I want to say it on this that if we generate 6,000megawatts in this country, the transmission network will not carry it. So, all this noise that we are making that we are targeting 10,000megawatts is nonsense because our networks are not okay. The distribution networks will not carry it. All the transformers are on over-load. So, until we decide to work and we start somewhere, we will still be speaking grammar.
Why must we do these things after privatisation? Should there be an abortion before pregnancy? Shouldn’t NERC have started creating awareness about this whole issue before we move into this new policy? It now that we are realising, the rain has started drenching us and we are looking for umbrella. If this is the policy, then let us go with it!
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