The Nation Newspaper

Tag: DISCOS

  • Poor revenue collection puts DISCOs in huge debt

    The 11 Electricity Distribution Companies (DISCOs) across the country are reeling under huge debts, following poor revenue collections from the electricity consumers.

    The Nation learnt that DISCOs are unable to collect as much as what they pay for power purchases.

    According to sources, some of the DISCOs hardly collect above half of the energy they purchase leaving them with huge deficits. It is because of this reason that the DISCOs are proposing upward review of electricity tariff to their customers and the regulatory body, the Nigerian Electricity Regulatory Commission (NERC).

    The Chief Executive Officer, Eko Electricity Distribution Company (EKEDC), Dr. Oladele Amoda, confirmed that. Amoda told The Nation that poor collection from customers for energy consumed is a problem faced by all the DISCOs.

    He said it was even because of the problem that the Federal Government had to intervene through the Central Bank of Nigeria (CBN) by giving the distribution firms low interest loans with monies from the investors to run their operations.

    Amoda said: “The Federal Government is assisting the distribution companies to remain in business.  You remember the Central Bank Nigeria assisted us with low interest loan that we now use to supplement what the investors bring. You know that money is very hard to come by now because people don’t pay for the electricity they consume.

    “Right now, our energy bill has gone up astronomically and the revenue we collect doesn’t cover the bill we get from the market. For instance, the last bill that we (EKEDC) got in August was about N4 billion and collection doesn’t reach N3 billion. You can see we are running at a deficit, because the tariff is not cost-effective.

    “You remember there was a freeze on actual tariff from January. So we were not collecting even the old tariff as should be. We were not collecting the amount we were supposed to collect. We supposed to the old tariff, which was N18 per kilowatt/hour (kwh) but NERC moved against it, and we continued to collect N14/kwh.”

    He said the DISCOs owe the market, and to pay these backlogs, that is why we need to quickly get the regulator to approve the new tariff so that we can cover the cost. The investors are not looking at profit now, but they are looking at breaking even so they can provide funds for capital projects in the short run, then later they start to make profit, he added.

    Amoda, however, commended the privatisation of the power sector despite the current challenges. I can say that privatisation is the toughest thing that has happened to this country after independence, and genuine democracy. If not for privatisation, maybe we (Nigerians) would not have light by now because power industry was neglected totally, he said.

     

  • Fed Govt’s MDAs owe distribution companies N32b

    The Federal Government’s ministries, departments and agencies (MDAs) and the military owe the 11 electricity distribution companies (Discos) across the country N32 billion, it was learnt.

    The Executive Director, Association of Nigerian Electricity Distributors (ANED), Sunday Oduntan told The Nation that the Discos have challenges in collection and the worst customers are Federal Government’s MDAs.

    He said: “N32 billion is still outstanding as Federal Government’s MDAs debt. It has not been paid till now. That N32 billion means a lot to us. If we have that money, we can buy meters and share to our customers.

    “Before I started shouting in the mass media, we had serious issue with MDAs. The military especially felt it is their right not to pay for the power they consume forgetting that the current power sector is under the private sector. In the budget, they actually have allowances for utility bills’ payment.  These military formations especially in Ikeja and Eko Electricity Distribution Companies, and even across the country are metered; therefore, it is not that they are on estimated billing or over-billed, and don’t have reasons not to pay.

    “We had a meeting with the Federal Government presided over by Vice President Prof Yemi Osinbajo, and he listened to all sides (all the stakeholders) including the Nigerian Electricity Regulatory Commission (NERC), Market Operators (MO), Nigerian Bulk Electricity Trading (NBET), generating, and distribution companies.

    “We all tabled our problems and the government has started looking at those issues; he promised us that the MDAs will pay the debts. I can assure that this government seems to be very serious, determined and sincere to provide electricity.”

    Oduntan said the commercial losses are very high citing a Disco that bought electricity worth of N3.2 billion and after preparing the billing, it got N2.6 billion leaving it with a deficit of N600 million. Out of the N2.6 billion bills it prepared, it would not be able to collect all of them due to non-payment as some customers aren’t willing to pay. This happens because some big men, welders and battery chargers, among others, bypass their meters. Out of the N2.6 million bills you prepare, you would not be able to collect all of them due to non-payment as some customers aren’t will to pay, he added.

    The Chief Executive Officer, Eko Electricity Distribution Company (EKEDC), Dr. Oladele Amoda, also stated that his company will remove payment of fixed charges by customers in the network. Amoda told The Nation at EKEDC stakeholders’ meeting/consultation in Lagos that once the customers approve the company’s proposed new tariff and NERC endorses it; the management will remove the fixed charges paid by the customers.

    The management of EKEDC has had several of such meetings where the customers agreed it should scale up the tariff but there must be commensurate power supply. The last meeting was to let the customers see and deliberate on the proposed tariff.

  • CPC to prosecute Benin, Enugu DISCOs for exploitative electricity billing

    CPC to prosecute Benin, Enugu DISCOs for exploitative electricity billing

    The consumer Protection Council (CPC) said it is set to commence prosecution procedure against Benin and Enugu Distribution Companies for violating its enabling Act in the on-going investigation of the activities of the country’s distribution companies (DISCOs).

    The CPC, in a statemnt, said it had to take this decision due to the non-appearance of the two power firms before  Council’s Panel, instituted to investigate numerous complaints of electricity consumers on estimated billings and non-provision of metres.

    “Benin Distribution Company was expected to appear before the Panel on Wednesday by 10 am, while Enugu’s time was 2pm the same day, in line with a schedule of appearance agreed upon with the representatives of the DISCOs at their meeting with the Council on Monday, September 7.

    “The distribution company, like its other counterparts, was also expected to have forwarded some documents that would aid the Council in its hearing by Friday, September 11 even though the date was shifted to Monday, September 14 for all the DISCOs, pursuant to a plea from the Association of Nigerian Electricity Distributors (ANED) for more time for the submission of the documents.

  • CPC probes DISCOS

    CPC probes DISCOS

    The Consumer Protection Council (CPC) has started investigation into indiscriminate increases in electricity bills, non-supply of metres to consumers, irregular disconnection with an assurance of prosecuting the electricity companies if there are no strong reasons for what they are doing.

    CPC Director-General, Mrs. Dupe Atoki, made this known at the opening ceremony of investigation into complaints of alleged consumer abuse  in Abuja.

    The investigation is being held behind closed doors after the opening ceremony.

    She said the Council will ensure speedy redress to consumer complaints, ensure consumer interest receive due consideration.

    She said CPC has carefully watched the ongoing reforms in the electricity sector, which commenced with the enactment of the Electric Power Sector Reform (EPSR) Act of 2005 and the unbundling of the erstwhile Power Holding Company of Nigeria (PHCN) by the Federal Government.

    “Two years after the privatisation of electricity distribution in the country, consumers are still groaning over almost all issues that existed in the old order, she said.

  • CPC summons DISCOs over alleged ‘crazy bills’

    CPC summons DISCOs over alleged ‘crazy bills’

    Inundated with consumer complaints over exploitative electricity billing, the Consumer Protection Council (CPC) has summoned all electricity Distribution Companies (DISCOs) in the country to a hearing over alleged outrageous billings, based on estimated consumption.

    The CPC, in response to complaints of electricity consumers on estimated billings and non-provision of meters, summoned each of the DISCOs, warning that absence of any of the companies at the hearing would be regarded as a violation of its enabling Act.

    The CPC, in a letter dated August 26, this year and signed by its Director-General, Mrs. Dupe Atoki, September 7 this year for hearing on the complaints.

    The agency, in its letter, stated that it “has been inundated with complaints commonly referred to as ‘crazy billing’, through which DISCOs are alleged to arbitrarily determine consumption level of consumers of electricity and bill them accordingly”. It  added that it also “received complaints that many consumers have paid for meters for periods spanning over 12 months, but are yet to be supplied same by their respective DISCOs”.

    It pointed out  that pursuant to these complaints, it has decided to commence investigation to “enable your organisation as well as other DISCOs make representation and state your position regarding the said complaints, particularly as they affect consumers in the area of your coverage.

    “You are, therefore, by this letter summoned to attend, make representation and submit a status report on the aforementioned complaints in your area of coverage, including any other document or evidence, to support your position at the hearing”, the Council declared.

    CPC, in its letter, cautioned the DISCOs to be “guided by Section 18 of the CPC Act that criminalises disobedience of its summon, which include neglect or refusal to attend and testify before the Council or to answer any lawful enquiry or to produce any document as may be required”.  It advised  the companies to “note that, whether you attend or not, far reaching decisions, which may be of consequence to your operations, may be taken after the hearing”.

  • Business owners issue one month ultimatum to DISCOs

    Piqued by the eratic power supply, Business owners in the South East have issued electricity companies one month ultimatum to either improve or face court action.

    They argued that the outage was not as a result of shortage in power generation, but due to incompetence on the part of the companies.

    Speaking at the weekend, Chief Sam Nwosu, Chairman, SACON Group who spoke on behalf of business owners in the South East, also called on the Federal Government to probe activities of the Electricity Distribution Companies (DISCOs) operating in the country.

    The group said they have been left with no other choice, adding  that businesses have continued to suffer untold economic hardship as a result of poor power supply despite the improvement in power generation.

    Nwosu in a petition noted that businesses have not been able to enjoy up to one hour power supply in the East compared with other parts of the country.

    Calling for the urgent intervention of the Federal Government, he said the power companies in the East have not displayed any level of competence.

    Nwosu also said that from close observation, it is obvious that due diligence was not carried out on most of the companies. He therefore called on the  government to look into the contract sales of the DISCOs and should any one fail the integrity test, such a contract should be revoked.

    The petition which was made available to Journalists reads: “we are also aware of the remarkable improvement in electricity supply across the country.

    “But unfortunately, we are not enjoying any of it here in Akwa, Anambra state. Yet at the end of the month your company sends us heavy bills including your “fixed rate” charges for services not rendered.

    “We are therefore constrained at this time to speak out and alert the National Electricity Regulatory Commission (NERC), the federal ministry of power, the Consumer Protection Council (CPC), Human Rights organisations, the newly appointed senate committee of inquiry on the activities of DISCs on our prolong and seeming intractable and insurmountable hardship.”

  • Over-billing: NERC orders DISCOS to refund N50m to Abuja consumers

    Over-billing: NERC orders DISCOS to refund N50m to Abuja consumers

    The Nigeria Electricity Regulatory Commission (NERC) has ordered the Abuja Electricity Distribution Company to refund the sum of N50m to its consumers in the Federal Capital Territory for over-billing them despite erratic power supply to homes and business premises.

    Chairman/Chief Executive Officer of NERC, Dr. Sam Amadi, stated this in his response to a query issued to his commission by the Senate on fixed charge, estimated billing and sundry issues.

    Amadi, had on Friday explained that his agency monitored all complaints reported to Discos on a monthly basis and had carried out analysis on them.

    He said, “The Commission has recently penalised Abuja Electricity Distribution Company for overbilling its customers and ordered it to refund the overbilled amount and also to apologise to the customers for wrongful estimation.

    “Abuja Electricity Distribution Company has refunded about 32,000 customers so affected. The refund ranged between N5,000 and N15,000 per customer, adding up to over N50m.”

    The NERC boss explained that the commission established the forum office made up of representatives of key stakeholders like the Manufacturers Association of Nigeria, the Consumer Protection Council, the Nigerian Society of Engineers and representatives of local Civil Society Organisations.

    He said the members elected their own chairman and address complaints from consumers, adding that their decisions, if not appealed against, are enforced by the commission.

    He said Disco had been mandated to establish functional Customer Complaints Units to receive and resolve all complaints from customers on electricity supply within its area of operation.

    According to the NERC chief, a timeline of 15 days had been specified in the regulation for the resolution of complaints by electricity customers, after which an appeal could be lodged at the Forum Office, established for that purpose.

    Amadi said, “The Forum Office represents the next level where electricity customers can seek redress from the non-performance of Discos in resolving their complaints.

    “Presently, NERC has established at least one Forum office in all the Discos to act as an appellate body in resolving complaints from electricity customers not satisfactorily resolved by the Customer Complaints of Discos.”

    He added that the commission agreed with the Senate’s position on the need to eliminate the practice of bulk billing of residential customers and to replace the practice with individual metering and billing.

    Amadi continued, “It is important to state that the commission had previously abolished bulk billing in its ruling on the VGC CASE NO:NERC/H/03/07. This case was brought by a customer against the VGC Estate Management and the Eko Electricity Distribution Company in 2008.

    “The commission ruled in favour of the customer. The decision of the commission stipulated that every customer is expected to be metered individually, irrespective of the status of supply coming into the area and the class of billing should be on R2 or as appropriately determined by  Disco.

    “The commission has, however, provided a leeway for estimation in situations where residential meters are not provided to customers. This is provided in the Estimated Billing Methodology Regulation of the Commission.

    “In this instance, statistical meters installed at transformer sub stations are used to calculate the energy to be used as a basis for estimating customers on the feeders.

    “Communities who are placed on bulk billing should reject it and insist on individual metering. The Commission is in the process of completing public consultation on a proposal to cap the amount an unmetered customer can pay until he or she is metered.

    “The proposal will also commit distribution  companies to strict deadline for metering of all its customers. In the interim,the Commission has abolished connection of new customers without meters.”

    The NERC boss further stated that the fixed charge that consumers pay in the Nigerian electricity market was not illegal or necessarily fraudulent.

    Rather, the fixed charges, he said, were part of the electricity markets across the world, but noted that the difference in Nigeria was that there was no good supply of electricity owing to lack of generation capacity.

    He said despite the poor power supply, consumers across the nation were paying fixed charges for epileptic or no power supply, just for Discos to recover the capital and fixed cost of the various operators in the industry.

    Said he, “Section 32 of the EPSR Act 2005 mandates the commission to approve tariff that allows investors recover their prudent cost with reasonable return on the assets invested in the business.

    “The operators invest in assets on a regular basis and recover their investment through fixed charge paid by the consumers.

    “In addition to this, it should be noted that once an asset is bought and a consumer is connected to the network, the utilities by law are expected to recover the cost of that investment whether energy is supplied or not.

    “Secondly, fixed charge is not tied to consumption as stated above and it is not peculiar to Nigeria alone. Many utilities all across the world charge fixed charges.

    “In essence, it is a universal practice, as obtained in many countries all over the world. Fixed charge is separately identified on bills in most countries, and is often called the ‘daily supply charge’ or ‘service to property’ charge.

    “It can be displayed as a daily rate on customer’s bills in some countries, but may appear as a single figure for a billing period.The generators are paid both capacity and energy charge.”

  • NERC goes tough on Discos over metering

    NERC goes tough on Discos over metering

    Dissatisfied with the level of implementation of the Credited Advance Payment for Metering Implementation (CAPMI) by majority of the distribution companies, the Nigerian Electricity Regulatory Commission (NERC) has signaled its intention to commence enforcement action for non-compliance.

    The Commission has given the distribution companies a seven day ultimatum to show cause why action should not be taken  against them for non-compliance stemming from violation of the provisions of the licence terms and conditions.

    This is contained in a letter to the defaulting utility firms -namely Port Harcourt, Abuja, Yola and Enugu distribution companies. Others are Ibadan, Ikeja, Eko and Benin Disco.

    The warning read ‘’ The Commission considers your actions as manifest and flagrant breaches and therefore requires you to show cause in writing within seven days from the date hereon, why enforcement should not be commenced against you and sanctions meted accordingly for non-compliance with the Terms and Conditions of the license granted you and the order on Credited Advance Payment for Metering Implementation’’.

    The order introducing the CAPMI scheme became effective on 14 May, 2013, in which NERC directed that the scheme should commence and be implemented at the same time in all the distribution companies. Furthermore, the discos were to redeploy meters under the scheme to willing customers, including the installation of same within 45days from the date of the payment by any customer.

    In the letter to the Discos, NERC noted that it has been observed from public consultation and monitoring exercises carried out by the Commission to ascertain the implementation level, showed that the discos either failed or neglected to fully implement the CAPMI scheme.

    Condition 2(1) of the terms and conditions of the licence granted the discos provides as follows: ‘’The licencee shall comply with the conditions of this licence and the requirements of the licenced  business as set out in the Act and Regulations approved by the Commission in accordance with the Commission’s statutory duty to monitor all licencees’’.

    They also have been found to be collecting money from customers for credit meters not minding whether they opted for the scheme, including not publicising the scheme thus giving misleading information to customers.

  • Senate seeks abolition of fixed electricity charges

    Senate seeks abolition of fixed electricity charges

    The Senate on Tuesday asked the National Electricity Regulatory Commission (NERC) to abolish the collection of fixed charges from electricity consumers in the country.

    The upper chamber also urged NERC to urgently inquire into numerous complaint before it by electricity consumers in line with the provision of Section 74(1)(b) of the Power Sector Reform Act.

    It directed Electricity Distribution Companies (DISCOs) to discontinue the practice of compulsory bulk metering of villages and communities in the rural areas as a consumer should have the right to elect to be part of bulk metering scheme or not.

    This is contained in a motion on “Unfair Trade Practice of Electricity Distribution Companies (DISCOs) in Nigeria,” sponsored by Senators Sam Egwu (Ebonyi North) and David Umaru (Niger East).

    The Senate also resolved to compel NERC to make a regulation mandating DISCOs to discontinue the practice of making consumer to pay for meters, poles and transformers which by law are property of the DISCOs.

     

  • NERC reads riot act to DISCOs over electricity allocation rejection

    NERC reads riot act to DISCOs over electricity allocation rejection

    The Nigerian Electricity Regulatory Commission (NERC) has issued an order imposing financial penalties on any electricity distribution company DISCO) that rejects electricity allotted it by the System Operators (SO). This is especially when there is no notification ahead of such rejection, its Head, Public Affairs , Dr. Usman Abba-Arabi, said yesterday.

    Order number NERC 139 entitled “Order on the Imbalance Application Mechanism during the Transitional Electricity Market” was issued on account of high incidence of indiscipline by electricity distribution companies who reject load allocations by the SO.

    Nigerian Electricity Supply Industry (NESI) operates on the basis of a sharing formula approved by NERC, which the SO uses to allocate generated electricity to the DISCOs, many of which are lately rejecting allocation.

    Rejection of load allocation besides causing imbalance in the system is preventing electricity consumers from realising the maximum benefit of the recent increase in the electricity generation. Electricity generation in the country about two weeks ago hit 4,600 megawatts (Mw) threshold.

    To curb indiscipline, NERC in the Order said: “Where a distribution company has a constraint on its network that will make it unable to receive load, the DISCO shall declare such constraint to the SO a day ahead. Where a DISCO fails to give the required notice, it will be penalised.

    “Every DISCO is obligated to receive load as directed by the SO, even beyond its statutorily allocated load at any time. This additional load will not attract penalty. In allocating additional load to distribution companies, the SO shall take cognisance of historical data on distribution company’s ability to take power beyond their location.”

    However, the Transmission Company of Nigeria (TCN) will be sanctioned if rejection of load allocation is caused by constraint in the transmission network.

    Giving an insight into the background of the Order which became effective over the weekend, the Commission’s Chairman, Dr. Sam Amadi said it was aimed at eliminating imbalance and make Nigerians have maximum impact of the improvement in the generating capacity and to also incentivise operators to invest in their network to take more power.