The Nation Newspaper

Tag: DISCOS

  • NLC urges DisCOs, NERC to obey court order

    The Nigeria Labour Congress (NLC) has urged Electricity Distribution Companies (DisCOs) and the Nigerian Electricity Regulatory Commission (NERC ) to obey the court order that electricity tariff must revert to the old rate as against the over 40 per cent increase that workers are paying.

    It said the disregard of the order by government agencies was illegal and a sign of impunity.

    Addressing journalists in Lagos, after the NLC  Central Working  Committee (CWC) meeting, the NLC President, Comrade Ayuba Wabba, said in spite of the subsisting court order declaring as illegal the electricity tariff review, NERC and DisCOs were yet to comply.

    “CWC-in-session called on NERC and DISCOs to obey without further delay, the subsisting court order by reviewing downward the current electricity tariff,” he said.

    On the proposed new minimum wage, Wabba said  in view of the  hiccups in the economy associated with inflation and the fall of the naira, a new minimum wage is not only imperative, but urgent as the  it cannot take the workers to the next bus stop.

    Wabba also warned against imminent increase in pump price of premium motor spirit (PMS), otherwise called petrol.

    He warned that the union would resist any attempt by marketers or the Federal Government to review upward the pump price of petrol.

    He said: “We are now justified when we opposed the initial increase in the pump price of petrol. Purchasing power of Nigerians has reduced drastically following the initial increase in petrol price per litre.

    “We said it will worsen purchasing power of the workers. This is now coupled with non-payment of salary, non payment of pension and gratuity.

    “Our position still stands and every attempt to increase it will be resisted vehemently. We will mobilise our sister unions and affiliates.”

    Following non-availability of foreign exchange for importation of petrol, there are rumours that marketers may increase pump price of petrol soon.

  • Discos not to blame for poor power supply

    Recently in Kenya, there was a blackout for four  hours and its  people wondered what   happened.

    Later, the power generating firm KenGen in a statement, blamed  a monkey, which tripped on an equipment in an hydro power  plant for the problem.

    The generation company (GenCo) said though the monkey survived, Kenya lost 183megawatts (Mw)  during the blackout. It apologised to consumers, promising to secure its facilities from  such hazards in future.

    I  can’t help admiring the way  the  firm handled the matter efficiently. Of  course most Nigerians will argue that the power supply in Kenya is not compared with  that of Nigeria because it is erratic here and blackouts are more.

    I agree with them.  This is because  the Kenyan  power firm has been allowed to do its public relations without  any pressure and without  any  ‘monkey’ tricks  or  interference from any  quarters  on the source  of  power  failure.

    In  Nigeria, however,  the way  blackouts  are  explained is different. The  culprits are  the distribution companies (Discos) that deliver electricity to our homes and companies.

    This has been reinforced by the   hostile  attitude of the trade unions in the power sector in that they mobilised consumers against the discos. Take the case of when tariffs were approved for the discos by the Nigerian Electricity Regulatory Commissionwere announced early  this year.

    The unions instigated even  the Senate  to stop  the tariffs hike and  NERC went  to  court  to accuse the Senate of usurping  its  legitimate  function as the regulator  of electricity. The unions  did  not  stop there; they asked workers to go on strike on the new  electricity  tariffs as if it is  the same thing with the fuel price increase to N145 on which  they called out workers on strike recently.

    This  is  despite  that discos don’t  generate or transmit electricity,  but  only  deliver  to  consumers  when it is   is available.

    Stakeholders in the electricity  industry include the Nigerian  Electricity Bulk  Trading  Company, gencos, discos  and transmission  companies. How come then that the union  leaders are always  pointing fingers at  the  discos when  there is a power  failure?  As  the  Kenyan  example  has  shown, it was  a genco  that explained  what  happened, not a disco.

    In  Nigeria, it  is true that pipeline vandalism  has  reduced  the generation and transmission of electricity  not  to  talk of distribution, which is the responsibility  of the discos.  But,  then,  can  the  discos  distribute  what  they  don’t  have?

    True, the gencos cannot generate power  when they don’t  have the  basic  ingredients to  do so and even  when  sources  of  such  generation  have  been rendered  unproductive  or inactive  by  vandals.  In  Kenya,  the  genco  was  lucky  that it was a  monkey that  cut  power  for hours  only.

    It  is  an army  of vandals  that  are stalling electricity production daily    and  they have  even  metamorphosed into  a virile terrorist group  called  the Avengers  of the Niger  Delta  who  are daring   and taxing  the  federal    might.

    That really is the core  of the matter  and  that  is what the unions should  focus on as the cause of irregular electricity supply.

    Therefore,  the  discos,  which  are  at  the receiving end  of the poor electricity supply chain,  should  not  be blamed  by  the  unions.

     

    • Aliu, an analyst, writes from Kano

  • Discos not to blame for poor power supply

    Recently in Kenya, there was a blackout for four  hours and its  people wondered what   happened.

    Later, the power generating company KenGen issued a statement, blaming  a monkey which tripped on an equipment in an hydro power  plant for the problem.

    The generation company (GenCo) said though the monkey survived, Kenya lost 183megawatts (Mw)  during  the blackout. It apologised to consumers, promising to secure its facilities from  such hazards in future.

    I  can’t help admiring the way  the  firm handled the matter efficiently. Of  course most Nigerians will argue that the power supply in Kenya is not compared with  that of Nigeria because it is erratic here and blackouts are more.

    I agree with them.  This is because  the Kenyan  power firm has been allowed to do its public relations without  any pressure and without  any  ‘monkey’ tricks  or  interference from any  quarters  on the source  of  power  failure.

    In  Nigeria, however,  the way  blackouts  are  explained is different.The  culprits are  the distribution companies (Discos) that deliver electricity to our homes and companies.

    This has been reinforced by the   hostile  attitude of the trade unions in the power sector in that they mobilised consumers against the discos. Take the case of when tariffs were approved for the discos by the Nigerian Electricity Regulatory Commissionwere announced early  this year.

    The unions instigated even  the Senate  to stop  the tariffs hike and  NERC went  to  court  to accuse the Senate of usurping  its  legitimate  function as the regulator  of electricity. The unions  did  not  stop there; they asked workers to go on strike on the new  electricity  tariffs as if it is  the same thing with the fuel price increase  to N145 on which  they called out workers on strike recently.

    This  is  despite  that discos don’t  generate or transmit electricity,  but  only  deliver  to  consumers  when it is   is available.

    Stakeholders in the electricity  industry include the Nigerian  Electricity Bulk  Trading  Company, gencos, discos  and transmission  companies. How come then that the union  leaders are always  pointing fingers at  the  discos when  there is a power  failure?  As  the  Kenyan  example  has  shown, it was  a genco  that explained  what  happened, not a disco.

    In  Nigeria, it  is true that pipeline vandalism  has  reduced  the generation and transmission of electricity  not  to  talk of distribution, which is the responsibility  of the discos.  But,  then,  can  the  discos  distribute  what  they  don’t  have?

    True, the gencos cannot generate power  when they don’t  have the  basic  ingredients to  do so and even  when  sources  of  such  generation  have  been rendered  unproductive  or inactive  by  vandals.  In  Kenya,  the  genco  was  lucky  that it was a  monkey that  cut  power  for hours  only.

    It  is  an army  of vandals  that  are stalling electricity production daily    and  they have  even  metamorphosed into  a virile terrorist group  called  the Avengers  of the Niger  Delta  who  are daring   and taxing  the  federal    might.

    That really is the core  of the matter  and  that  is what the unions should  focus on as the cause of irregular electricity supply.

    Therefore,  the  discos,  which  are  at  the receiving end  of the poor electricity supply chain,  should  not  be blamed  by  the  unions.

     

    • Aliu, an analyst, writes from Kano
  • Forex shortage hits DisCos’ metering plan

    Forex shortage hits DisCos’ metering plan

    These are not the best of times for power distribution companies (DisCos).

    They are finding it difficult to get enough foreign exchange (forex) for the importation of meters and other equipment, The Nation has learnt.

    A source, who does not want to be mentioned, said the Discos could not procure meters because of their weak financial positions caused by non-payment of bills by customers.

    The source said many of the power firms supply meters which they imported before the exchange rate went up.

    The Association of Nigerian Electricity Distributors (ANED) Executive Director, Mr. Sunday Oduntan, said funds were limiting the capacity of the firms to import meters for their customers.

    He said the firms have not been able to close the metering gap of over five million households, which they inherited from the Power Holding Company of Nigeria (PHCN) in November 2013, due to scarcity of forex.

    He said the firms were seeking forex concessions from the Federal Government to import meters for customers, among others.

    Oduntan said: “The capacity of the DisCos to meet the metering needs of their customers has been limited by scarcity of forex. At N350 to a dollar at the parallel market, it is impossible for the firms to buy dollars that would be enough to import meters and other equipment. The cost of buying dollar has increased by over 100 per cent when compared to an exchange rate of N165 to a dollar few years ago.

    “The development hinders DisCos from closing the metering gap of over five million households inherited from the Power Holding Company of Nigeria (PHCN) in 2013. Out of this figure, only 2.8 million households have gotten meters. Inability of the DisCos to get forex concessions for importation means many people would not get their meters in time.”

    Oduntan noted that power firms, such as the Ibadan Electricity Distribution Company (IBEDC), Benin Electricity Distribution Company (BEDC), Eko Electricity Distribution Company (EKEDC), Ikeja Electric (IK) and Kano Electricity Distribution Company (KEDC), have supplied meters to customers in recent times.

    According to him, people who need meters are growing by the day as more houses are being built.

  • Spinning reserve dips to 9.8Mw

    Spinning reserve dips to 9.8Mw

    Some stakeholders of the Electricity Distribution Companies  (DisCos)  yesterday raised the alarm over the dip in the spinning reserve in the electricity market to 9.8 mega watts (Mw).

    Spinning Reserve is the difference between the total generated energy and what electricity system operator sends out to the DisCos.

    But the “reserve which is supposed to be a sort of storage that the market should have a recourse to when the grid breaks down or there is any emergency is fast depleting to nothing,” an industry stakeholder said yesterday.

    He added that the spinning reserve serves to keep the grid stable.

    The reduction, according to a source from one of the power generation companies (genCos), was due to attacks on the nation’s gas pipelines.

    Prior to the attacks on the pipelines, spinning reserves was about 72Mw but it was 9Mw on May 27, rose to 32Mw on May 28, and dipped to 9Mw on May 29 and yesterday it reduced to 9.8Mw.

    The Nigeria Electricity System Operator noted on its website that on Sunday, the energy that was sent out to the DisCos was 1,978Mw and that its lowest generation was 175.60Mw, adding that the market hit a peak generation of 2,910Mw.

    The Nigerian Electricity Supply Industry (NESI) said on its website that “on May 29, average energy sent out was 1978Mwh/hour (down by 482Mwh/h). The reported gas constraint was 3,481Mw. The reported line constraint was 97Mw. The water management constraint was 380Mw. The power sector lost the estimated equivalent of N1, 900, 000, 000 on May 29 due to constraints.”

  • DisCos are frustrating availability of meters

    DisCos are frustrating availability of meters

    One issue that has pitched power distribution companies (DisCos) against their customers is meter. In this interview, the Chief Executive officer, MEMCOL Nigeria Limited, a meter manufacturing company, Mr Kola Balogun, said metering problems remained unresolved because of the deliberate action of the DisCos to continue milking consumers through estimated billing regime. Balogun spoke with AKINOLA AJIBADE on this and other issues. 

    What is the state of the metering industry in Nigeria?

    The situation in the industry could be likened to happenings in the country. The industry is a reflection of the inconsistencies that has characterised the polity called ‘Nigeria’. These inconsistencies have helped in slowing down the growth of the nation’s economy. In order to contribute to the industrial growth of the country, MOMAS Nigeria Limited started investment in metering business about 20 years ago. The idea has paid off as the firm has manufactured and deployed a lot of meters to consumers, prior to 2013 when the power sector was privatised. Not done yet, the firm wants to increase its production in order to deepen the growth of the sector. To achieve this, the company has invested in meter facility in the West Africa sub- region.

    What is the capacity of the metering industry, vis-a-vis the number of meters, which local manufacturers can produce?

    The industry has capacity to absorb several millions of meters. In fact, it would be difficult for the country to exhaust the volume of meters produced locally in view of the fact that many new houses are springing up annually. Presently, five meter manufacturing firms are operating in the country, albeit at lower capacity. They are MEMCOL, MOJEK, UNISTAR, EMCON and SWEDEN Nigeria Limited. MEMCOL has the capacity to produce 50,000 meters monthly, while each of the remaining four companies can produce between 20,000 to 30,000 meters.

    What is the major threat to the growth of local meter manufacturers?

    Lack of patronage is the major threat to the growth of local manufacturers of meters in Nigeria. The power distribution companies (DisCos), which by law are required to buy meters for onward distribution to their customers, hardly buy from local manufacturers. Usually, the DisCos buy meters from manufacturers abroad.  They go outside the country to open credit facility, buy meters there and bring them to Nigeria.  Whenever the DisCos buy meters from local producers, they do so on credit. This has made it difficult for local manufacturers to survive. However, Ibadan power distribution company (IBEDC), its counterparts in Abuja and Port Harcourt are buying meters regularly from MEMCOL Nigeria Limited. It is sad that meters that are manufactured by local companies are not well patronised.

    Beyond this, what are the other problems facing manufacturers of meters in Nigeria?

    Electricity is another factor inhibiting the growth of the manufacturers. The worsening power situation and its attendant poor supply in the country is taking its toll on manufacturers of meters, and other products. In MEMCOL Nigeria Limited, access to power from the grid has not been encouraging. The reason is because power is not readily available in Mowe-Ibafo business corridor where the company is located. Many industries would have sprung up in that corridor, but for the poor electricity supply in the country. And to stay in business, we decide to run our factory on generator, albeit with pains. It is difficult for a business that is run on generators to be cost-effective. That is why I said earlier that the development of industries is a function of a nation, and not an individual. It is the nation that is expected to protect industries from collapsing.

    What is the level of capacity utilisation in the industry?

    The capacity utilisation is dropping fast. The reason is because the metering companies are operating at optimal capacity. The firms are keeping huge stocks in their factories, due to lack of patronage. Our company has a large quantity of meters in store. Since we are not producing optimally due to problems such as poor patronage, electricity and others, we decided to cut down our workforce, pending the time when situation improves. We cannot afford to keep the human resources (personnel) that would help in producing meters, when it is obvious that the micro and macroeconomic environment in which we operate is not favourable. We cannot continue to keep, having realised that they would be idle because it would be difficult paying their salaries. So this has made capacity utilisation to drop drastically. In the event that the five companies approved by the government to manufacture meters are well financed, they would not only produce a lot of meters monthly, but would assist in bridging the supply and demand gap in the industry.

    The low patronage of your meters by electricity distribution firms, may be due to their low quality?

    To the best of my knowledge, meters that are produced in the country are of good quality. The meters can compete favourably in terms of quality, with those meters that are being imported from countries like China, South Africa, among others.

    For instance, at MELCOM, we produce intelligent meters- meters that provide more than ‘two-way communication. We are designing meters that have higher integrity and standards. We manufacture meters that allow users or owners to communicate with them easily.From a distance, owners can communicate with their meters by knowing what is happening to them.We produce both pre-paid meters and smart pre-paid meters. The former can be easily by-passed by criminals, while the latter cannot be by-passed.

    What efforts are you making to convince DisCos of the quality of your meters?

    What other convictions do the power distribution companies need from us again? We have been producing meters that are not only of good quality, but can compare with the ones produced abroad. The DisCos are aware of this. They know that our meters are good. However, the issue of poor patronage suffered by indigenous manufacturers of meters is beyond quality. Two reasons suffice in this regard. First, the craze for products produced in foreign countries by Nigerians has affected the sales of meters manufactured in the country.

    Secondly, the decision by the DisCos to continue to charge consumers estimated bills make them to buy meters abroad. The DisCos know that local manufacturers have capacity to meet their metering needs, and that once they fully patronise indigenous manufacturers, they would not have any excuse of not providing meters to customers under their jurisdictions. When this happens, it would be difficult for the DisCos to charge estimated bills.

    Can you substantiate the claims that DisCos refused to buy meters from local manufacturers because they want to continue to collect estimated bills?

    It is not an allegation. It is a fact. We have found out that estimated bills are the easiest ways of generating revenue by the DisCos. The power firms are hiding their love to make money through estimated billings. The investors, who bought the assets of the Power Holding Company of Nigeria (PHCN), borrowed money to acquire these assets. They need to refinance the loans they got from banks. And the safer and easier way to do this is to make money, by collecting outrageous or crazy bills from customers overtly or covertly.

    What is the solution to problems such as low patronage, and poor funding facing local manufacturers of meters?

    The solution lies in the ability of the Federal Government to support local meters manufacturers with funds. The government should try and provide intervention funds for manufacturers of meters, the same way it provided funds for the power generation companies (GenCos) DisCos in order to subsidise their operation. If the government can provide funds for power generation companies, it should also provide funds for companies servicing them.

    The government should intervene in order to prevent metering industry from collapsing. Also, the government should compel DisCos to buy meters from local manufacturers since they are producing quality meters. Doing this means that the government is killing two birds with one stone. By this, the government is promoting local content initiatives, introduced to promote the growth of indigenous business operators, while at the same time, helping in conserving foreign exchange. This means that monies that are spent on importation of raw materials and finished goods, would be domiciled in the country. When we make do with what we have, we are saving the country from brain drain. The multiplier effects are industrial growth, technological advancement, unemployment generations and others.

    How will provision of intervention funds, by the government, solve the problems of meter’ manufacturers?

    Yes, the funds would improve the conditions of the manufacturers. Once the Central Bank of Nigeria (CBN) makes the funds available to manufacturers at a single-digit interest rate, the pressures on firms that produce meters locally would reduce. The loan portfolio of local manufacturers is too bad, because they are borrowing money at commercial rate of about 25 per cent. This is against a situation, where foreign companies are getting loans at less than five per cent. How do we compete with our foreign counterparts? The government needs to intervene urgently in the metering industry, by supporting it with funds.

  • Discos begin mass disconnection over N93b debt

    Discos begin mass disconnection over N93b debt

    Electricity Distribution Companies (Discos) have begun mass disconnection of customers that owe them huge debts including government establishments, it was learnt at the weekend.

    The DisCos have in the last two years been lamenting the huge unpaid debts by the customers especially the Ministries, Departments and Agencies (MDAs) and the military. As at end of last month, the total debt was in excess of N93 billion, the utility firms said. With the DisCos decision, there will be long widespread blackout as they (DisCos) are insisting on reconnection only when payment is made.

    This class of debtors, according to the DisCos, cut across all customers including residential, commercial, Industrial, and government establishments across the three tiers of government, adding that these customers have to seek alternative means of electricity supply until the debt issue is resolved.

    The DisCos recently gave ‘historic’ debtors deadlines within which to pay their debts or have their electricity supply disconnected.

    The Executive Director, Research and Advocacy, Association of Nigerian Electricity Distributors (ANED), Sunday Oduntan, said the DisCos had to carry out its threat of mass disconnection when it became “obvious that there is nothing on the table.”

    He said: “Although we appreciate the efforts of the Vice President, Prof Yemi Osinbajo and the Minister of Power, Works and Housing, Babatunde Fashola, but the stark reality is that there is nothing concrete to hold on to. No allowance for MDAs debt to DisCos in the budget, even though we started discussion before the budget was passed. The indebtedness has become so huge that we are truly troubled about how the government would resolve this without a budgetary allocation. “

    Oduntan however, noted that the current mass disconnection by DISCOs is not targeted at MDAs, “but all historic debtors.”

    “Our position is that this indebtedness is killing us; it is seriously impacting negatively on the entire value chain in the power sector equation. Don’t forget that only 25 per cent of this debt actually belongs to DisCos, the rest are for other companies in the value chain – generating companies, the Bulk Trader, Gas suppliers, among others.

     So if you don’t pay and you accumulate debt, what you are looking at is a possible total collapse of the entire power sector. That is what we seek to avert by this action. We need this fund to energise the power sector; to ensure electricity supply and to grow the sector.”

  • DISCOs are frustrating availability of meters 

    DISCOs are frustrating availability of meters 

    One issue that has pitched power distribution companies (DISCOs) against their customers is meter, due to its unavailability. In this interview, the Chief Executive officer, MEMCOL Nigeria Limited, a meter manufacturing company, Mr Kola Balogun (an engineer) said metering problems have remained unresolved because of the deliberate action of the DISCOs to continue milking consumers through the estimated billing regime which is more rewarding for them. Balogun spoke with AKINOLA AJIBADE on this and other issues. Excerpts:

    What is the state of the metering industry in Nigeria?

    The situation in the industry could be likened to happenings in the country. The industry is a reflection of the inconsistencies that has characterised the polity called ‘Nigeria’. These inconsistencies have helped in slowing down the growth of the nation’s economy.  In order to contribute to the industrial growth of the country, MOMAS Nigeria Limited started investment in metering business about twenty years ago. The idea has paid off as the firm has manufactured and deployed a lot of meters to consumers, prior to 2013 when the power sector was privatised. Not done yet, the firm wants to increase his production in order to deepen the growth of the sector. To achieve this, the company has invested in meter facility in the West Africa sub- region.

    What is the capacity of the metering industry, vis-a-vis the number of meters, which local manufacturers can produce?

    The industry has capacity to absorb several millions of meters. In fact, it would be difficult for the country to exhaust the volume of meters produced locally in view of the fact that many new houses are springing up annually. Presently, five meter manufacturing firms are operating in the country, albeit at lower capacity. They are MEMCOL, MOJEK, UNISTAR, EMCON and SWEDEN Nigeria Limited. MEMCOL has the capacity to produce 50,000 meters monthly, while each of the remaining four companies can produce between 20,000 to 30,000 meters.

    What is the major threat to the growth of local meter’ manufacturers?

    Lack of patronage is the major threat to the growth of local manufacturers of meters in Nigeria. The power distribution companies (DISCOs), which by law are required to buy meters for onward distribution to their customers, hardly buy from local manufacturers. Usually, the DISCOs buy meters from manufacturers abroad.  They go outside the country to open credit facility, buy meters there and bring them to Nigeria.  Whenever the DISCOs buy meters from local producers, they do so on credit. This has made it difficult for local manufacturers to survive.  However, Ibadan power distribution company (IBEDC), its counterparts in Abuja and Port Harcourt are buying meters regularly from MEMCOL Nigeria Limited. It is sad that meters that are manufactured by local companies are not well patronised.

    Beyond this, what are the other problems facing manufacturers of meters in Nigeria?

    Electricity is another factor inhibiting the growth of the manufacturers.  The worsening power situation and its attendant poor supply in the country is taking its toll on manufacturers of meters, and other products. In MEMCOL Nigeria Limited, access to power from the grid has not been encouraging. The reason is because power is not readily available in Mowe-Ibafo business corridor where the company is located. Many industries would have sprang up in that corridor, but for the poor electricity supply in the country.  And to stay in business, we decide to run our factory on generator, albeit with pains. It is difficult for a business that is run on generators to be cost-effective. That is why I said earlier that the development of industries is a function of a nation, and not an individual. It is the nation that is expected to protect industries from collapsing.

    What is the level of capacity utilisation in the industry?

    The capacity utilisation is dropping fast. The reason is because the metering companies are operating at optimal capacity. The firms are keeping huge stocks in their factories, due to patronage. Our company has a large quantity of meters in store. Since we are not producing optimally due to problems such as poor patronage, electricity and others, we decided to cut down our workforce, pending the time when situation improves. We cannot afford to keep the human resources (personnel) that would help in producing meters, when it is obvious that the micro and macroeconomic environment in which we operate is not favourable. We cannot continue to keep, having realised that they would be idle because it would be difficult paying their salaries.  So this has made capacity utilisation to drop drastically. In the event that the five companies approved by the government to manufacture meters are well financed, they  would not only produce a lot of meters monthly, but would assist in bridging the supply and demand gap in the industry.

    The low patronage of your meters by electricity distribution firms, may be due to their low quality?

    To the best of my knowledge, meters that are produced in the country are of good quality. The meters can compete favourably in terms of quality, with those meters that are being imported from countries like China, South Africa, among others.

    For instance, at MELCOM, we produce intelligent meters- meters that provide more than ‘two-way communication. We are designing meters that have higher integrity and standards. We manufacture meters that allow users or owners to communicate with them easily.  From a distance, owners can communicate with their meters by knowing what is happening to them. We produce both pre-paid meters and smart pre-paid meters. The former can be easily by-passed by criminals, while the latter cannot be by-passed.

    What efforts are you making to convince DISCOs of the quality of your meters?

    What other convictions do the power distribution companies need from us again? We have been producing meters that are not only of good quality, but can compare with the ones produced abroad.  The DISCOs are aware of this. They know that our meters are good.  However, the issue of poor patronage suffered by indigenous manufacturers of meters is beyond quality. Two reasons suffice in this regard.  First, the craze for products produced in foreign countries by Nigerians has affected the sales of meters manufactured in the country.

    Secondly, the decision by the DISCOs to continue to charge consumers estimated bills make them to buy meters abroad. The DISCOs know that local manufacturers have capacity to meet their metering needs, and that once they fully patronise indigenous manufacturers, they would not have any excuse of not providing meters to customers under their jurisdictions. When this happens, it would be difficult for the DISCOs to charge estimated bills.

    Can you substantiate the claims that DISCOs refused to buy meters from local manufacturers because they want to continue to collect estimated bills?

    It is not an allegation. It is a fact. We have found out that estimated bills are the easiest ways of generating revenue by the DISCOs. The power firms are hiding their love to make money through estimated billings.  The investors, who bought the assets of the Power Holding Company of Nigeria (PHCN), borrowed money to acquire these assets. They need to refinance the loans they got from banks. And the safer and easier way to do this is to make money, by collecting outrageous or crazy bills from customers overtly or covertly.

    What is the solution to problems such as low patronage, and poor funding facing local manufacturers of meters?

    The solution lies in the ability of the Federal Government to support local meters manufacturers with funds. The government should try and provide intervention funds for manufacturers of meters, the same way it provided funds for the power generation companies (GENCOs) and power distribution companies (DISCOs) in order to subsidise their operation. If the government can provide funds for power generation companies, it should also provide funds for companies servicing them.

    The government should intervene in order to prevent metering industry from collapsing. Also, the government should compel DISCOs to buy meters from local manufacturers since they are producing quality meters. Doing this means that the government is killing two birds with one stone. By this, the government is promoting local content initiatives, introduced to promote the growth of indigenous business operators, while at the same time, helping in conserving foreign exchange. This means that monies that are spent on importation of raw materials and finished goods, would be domicile in the country. When we make do with what we have, we are saving the country from brain drain. The multiplier effects are industrial growth, technological advancement, unemployment generations and others.

    How will provision of intervention funds, by the government, solve the problems of meter’ manufacturers?

    Yes, the funds would improve the conditions of the manufacturers. Once the Central Bank of Nigeria (CBN) makes the funds available to manufacturers at a single-digit interest rate, the pressures on firms that produce meters locally would reduce. The loan portfolio of local manufacturers is too bad, because they are borrowing money at commercial rate of about 25 per cent. This is against a situation, where foreign companies are getting loans at less than five per cent. How do we compete with our foreign counterparts? The government needs to intervene urgently in the metering industry, by supporting it with funds.

  • DisCos of darkness

    POWER outage is not strange in this land. It is something we have become used to. We are only surprised when light is stable. We keep on wondering what is happening, expecting the light to go off any time. As long as there is light we feel uncomfortable. It is as if something is wrong somewhere; as if we are being propelled by a force to will the power authority to cut light. Call it the force of darkness, you may not be wrong.

    Living in darkness has been our lot since the days of the Electricity Corporation of Nigeria (ECN) – the forerunner of the National Electric Power Authority (NEPA).

    With the explosion in our population by the time NEPA came into being in 1972, it was obvious that we may be having an energy crisis if we did not do the right things. We relied solely on hydropower for our supply needs then. It was not the era of gas turbines and power plants.

    Our inability to get the power sector right has done a lot of havoc to the economy. Many companies are today running below capacity because of irregular power supply. Many have sacked workers to remain afloat and yet many have relocated to other countries where the environment is friendlier. The story does not end there. Others have folded up because they cannot cope. In this category are the textile firms, which used to employ millions of people. Today, the textile industry is dead. Go to the Ikeja Industrial Estate on Oba Akran Avenue and see the carcass of the Nigerian Textile Mills. Many others abound like that in Kaduna and Kano.

    The real sector is hard hit by this problem. Manufacturing companies are now comatose because their machines cannot run at optimal capacity. These machines require uninterrupted power to function well.

    Like large scale companies, small businesses also suffer from the power problem. They are hard hit because they do not operate an economy of scale. Theirs is a cash and carry business run on the basis of what can be tagged as ‘’pay as you go’’. They cannot expand their businesses easily because they do not have the financial muscle. All they do is subsistence business – trading to get what to eat. These days, they can barely make ends meet because of the terribly low power supply.

    Ironically, it is the government that is asking Nigerians to be creative that is killing talents. As it is for businesses, so it is for individuals. In our respective homes, we run a mini-government, providing for ourselves services which should be rendered by the government. We dig boreholes for water supply; we run generators to provide light and through communal efforts we build our own roads. Yet, we pay tax; but we do not see what it is being used for.

    Getting power right is crucial to remaking Nigeria. There is nothing we will achieve as a nation if we do not address the power challenge frontally. The privatisation of the sector was meant to achieve this. The gains of the  2001 deregulation of the telecommunication sector opened our eyes to the inherent benefits of getting government out of business.

    We were upbeat about the privatisation of power because we thought it would change the electricity supply equation for good. The 2003 unbundling of the Power Holding Company of Nigeria (PHCN), which succeeded the NEPA in 2005, into 18 successive generation companies (GenCos) and distribution companies (DisCos), was supposed to end our power woes. We never knew that it will mark the beginning. The GenCos and DisCos have been in business for about three years now, yet we have not felt their impact. The other day, a friend disagreed with my observation, saying: “but they have been distributing darkness!”  Can you beat that? All we have been getting from these companies are excuses on why they cannot deliver.

    It seems they did not bargain for what they are getting. These firms probably thought that they were walking into money by acquiring the assets of the PHCN. They appeared to have forgotten that business is not a bed of roses. Acquisitions are not always what they seem from outside until you get inside. A seasoned businessman does not only look at the assets of a concern, but also at its liabilities. The GenCos and DisCos missed the way by looking at the good side of the books only; they did so because they were thinking only in terms of naira and kobo – that is what is in it for them in the short run and not what they were going to give to customers in the long run in terms of efficient service.

    Under them, power supply has collapsed, yet they keep on harassing customers to pay their bills. To pay for services not rendered? In recent times, they have been placing adverts in the papers, threatening to disconnect debtor-customers. What are they waiting for? They should go ahead and start the exercise having fulfilled the requirement of serving customers a notice before disconnecting them. What difference will it make if they disconnect debtors? Have they not thrown the nation into darkness already with their incessant power outages? Those of us not owing them do not enjoy their services. There was nothing to show for the N750 monthly Service Charge they used to collect from us before it was scrapped with the coming of the new tariff last February 1.

    They fought tooth and nail to retain the charge because whether or not they gave us light in a particular month, they will be entitled to the money. The DisCos, especially have not been up and doing; they should buckle up in order to win customers’ confidence. We know that there are challenges; but they, as corporate entities, should have factored these into their operations before taking off.

    We know all about the gas problem; the clash with former PHCN workers; the vandalism of power plants and cables and the resurgent Niger Delta militancy, but all these cannot justify the DisCos’ poor performance so far. They can do better and I hope they will change for the better before customers rise against them.

  • ‘Govt agencies, military owe DISCOs N93b’

    The Association of Nigerian Electricity Distributors (ANED) has said that the distribution companies (DISCOs) are owed at least N93billion by government and security agencies.

    Its Executive Director, Sunday Oduntan, a lawyer, said the sum is made up of N39.1billion owed before privatisation and N39.5billion after.

    According to him, there is an outstanding interest of N15billion arising from unpaid energy bills by DISCOs due to non-settlement of utility bills.

    Saying the proposed mass disconnection was justified, Oduntan said the DISCOs, for months, have been groaning under severe liquidity constraints.

    He said Abuja DISCO is owed N18.6 billion; Eko, N8.6 billion; Kaduna, N8.2 billion; Enugu, N7.2 billion; Ibadan, N6.8 billion; Ikeja, N5.9 billion; Port Harcourt, N6.8 billion; Benin, N5.8 billion; Jos, N6.5 billion; Yola, N2.4 billion and Kano, N1.2 billion.

    “Cash strapped and further squeezed of working capital by the resistance that greeted the new power tariff structure, the distribution companies’ predicament has been made more precarious by the refusal of these historic debtors, particularly the MDAs, to pay for power consumed,” Oduntan said.

    He said ANED was working with the office of the Vice President to resolve the issue.

    He said VP’s office came up with a new template in which all DISCOs would state what each agency, department, the Army, Air force, Navy, among others, owe.

    He said as at last Friday, all DISCOs had submitted their claims using the template.

    Oduntan said although his association believes in the government’s ability to resolve the issue, the DISCOs “are very serious about their threat to embark on mass disconnection of historic debtors in the days ahead if they refuse to honour their commitment.”