By Akoma Chinweoke
For those who know, the erratic power supply in the country is not surprising. Currently, the Electricity Distribution Companies in Nigeria (DISCOs) are unwilling to accept all the power generated by Power Generating Companies (GENCOs).
Consequently, while there is idle generation capacity of about 3,000 MW (40%), consumers suffer lack of power due to the unwillingness of DISCOs to accept all the power generated.
The DISCOs have continued to do this obviously because they get away with billing consumers for power not supplied in a scheme that is popularly called ‘crazy billing’. So, as long as DISCOs are able to extort consumers for power not supplied, the DISCOs will have no incentive to accept more power for their customers.
Sunday Vanguard spoke with Martins Onovo, an engineer and the presidential candidate of the National Conscience Party (NCP) in the 2015 general elections, on the way out of the unending power sector crisis in Nigeria. Excerpts:
What is your expert opinion on the crisis in the power sector despite the efforts to reposition the sector?
If we conduct a proper investigation, we can easily confirm that the Nigerian factor is the root cause of the crisis in the power sector. The Nigerian factor is the irregular way most public and socio-economic activities are conducted due to endemic corruption. Crisis in the sector can be seen from the inadequate supply of power by electricity Distribution Companies (DISCOs), the estimated billing system, the litigation between DISCOs and consumers; and the dissatisfaction and disagreements between principal stakeholders in the sector, etc. The Nigerian factor affects not only the power sector but all other sectors including education, health and law enforcement.
The efforts made to re-position the sector were misdirected. We publicly predicted very accurately that they would fail as they have failed. The policy framework was not only unpatriotic and unconstitutional but was also inappropriately implemented.
These led to the current crisis. Prior to the privatization of power generation and distribution facilities, the problems of the sector were simply inadequate generation capacity; weak transmission systems and constrained distribution facilities.
The simple solutions to the problems were increased generation capacity through maintenance and upgrading of existing facilities and the development of new generation facilities, maintenance, upgrade and extension of existing transmission infrastructure, and maintenance, upgrade and extension of existing distribution systems.
Instead of these simple solutions, the government transferred the ownership of the public generation and distribution facilities to private entities that had not demonstrated technical and financial capacity to manage such facilities. The government also recruited a management company for our transmission facilities. These changes caused the interface management problems between the generation and transmission companies and also between the transmission and the distribution companies.
Currently, DISCOs are unwilling to accept all the power generated by generating companies (GENCOs). Consequently, while there is idle generation capacity of about 3,000 MW (40%), consumers suffer even more pernicious lack of power due to the unwillingness of DISCOs to accept all the power generated. The DISCOs have continued to do this obviously because they get away with billing consumers for power not supplied in a scheme that is popularly called ‘crazy billing’.
As long as DISCOs are able to extort money from consumers for power not supplied, they will have no incentive to accept more power for their customers. For emphasis, as long as DISCOs can accept only say 1,000MW from the system and supply same to their customers but bill the same customers (crazy bills) for 9,000MW, then the DISCOs profiteer and have no incentive to accept and supply the 9,000MW that they bill for. The national ethical ambience allows this abnormality. To remedy this, the House of Representatives recently passed a bill that criminalizes ‘crazy billing’.
Many had thought that with the privatization of PHCN, the era of erratic power supply was over but the problem persists. Are you saying that the exercise was a wasted effort?
Those that thought so did not understand the problem. In Nigeria, power is first generated from generating stations like gas turbine generator stations or hyro-power generator stations. Then it is transmitted from the generating stations through the national grid. It is then distributed to consumers through the distribution systems. We must generate more, transmit more and distribute more power to close the electric power supply gap. Unbundling was simply a change of the corporate management structure of the public power supply sector. It did not increase generation or transmission or distribution capacity. It simply changed the management structure.
There appears to be endless controversy around DISCOs on the issue of pre-paid meters. How do you react to that as many are paying for power not consumed?
Electric meters (pre-paid or post-paid) are necessary to ensure transparency and integrity in the billing system and eliminate ‘crazy bills’. DISCOs are clearly unwilling to meter customers since the lack of meters provides the opportunity for them to profiteer by issuing ‘crazy bills’. No customer should pay for power not consumed.
This is the correct moral and legal position. The Ministry of Power and the National Electricity Regulatory Commission (NERC) insist on this position but they have been unable to enforce it for many years. The bill passed by the House of Representatives to criminalize ‘crazy bills’ may make it easier to enforce metering when the bill becomes law.
What is the way-forward for the sector since it is crucial to Nigeria’s economy?
The way-forward is simply to enforce all Nigerian laws on all stakeholders and enforce the agreements with DISCOs and also enforce the regulatory standards set by NERC. We must also continuously improve the performance of all critical stakeholders in the electric power sector using preventive, verificative and corrective management systems routinely. These systems may include updated technical standards, updated standards of performance, technical and financial audits, regulatory investigations and penalties for non-compliance.