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Tag: Electricity

  • Why many electricity consumers are aggrieved — Foundation

    The Executive Director, Consumer Advocacy Foundation of Nigeria, Mrs Sola Salako-Ajulo, says many electricity consumers are aggrieved  that they are forced to pay for electric power they did not consume.

    Salako-Ajulo spoke at a Power Sector Stakeholders and Consumers Summit organised by the Electricity Consumer Protection Forum on Wednesday in Lagos.

    The News Agency of Nigeria (NAN) reports that the forum, tagged: “Five Years after Privatisation of Power Sector, What Next?”, brought together stakeholders in the power sector and consumers in the state.

    Salako-Ajulo said that the first step to stop such exploitation remained proper enumeration of electricity consumers and provision of meters.

    She described the practice of estimated billing as illegal.

    “Our problem is not that they are not giving us power; our problem is that you are charging us for what we don’t consume.

    “We must be sincere in this country. Every house should have a meter,” she said.

    Mr Adeola Ilori, the National Coordinator of the forum, also said that electricity consumers had suffered much in the hands of the Gencos and Discos.

    Ilori said that the privatisation of the power sector had not reduced the trauma of electricity consumers, five years after.

    “The money people pay for electricity is far higher than the rent.

    “Nigerian Electricity Regulatory Commission (NERC) has not been playing its role. How long again will it take the issue of estimated billing to become a thing of the past?

    “How long will consumers bear the cost of providing transformers, wire, cables and poles for a private profit-oriented organisation to serve them when the cost of such are already infused into monthly tariff?

    “How long are we going to watch regulatory body behaving like an ostrich to the plight of the consumers?

    “Our group and members are ready to defend themselves against any form of oppression, deliberate and willful disobedience of extant laws,” Ilori, a legal practitioner said.

    Representatives of the Association of Nigerian Electricity Distributors (ANED) and the Association of Power Generation Companies (APGC), on their part, listed challenges to having uninterrupted power supply in the country.

    In his speech, Mr Sunday Oduntan, the Executive Director, ANED (Research and Advocacy) said that insincerity to people on electricity since 1960 had affected positive result in power generation, transmission and distribution.

    Oduntan spoke on the topic: “Are we better in service delivery than the older order? How can it be improved?”

    According to him, the population of the country, estimated at over 180 million, is higher than the megawatts being generated and distributed to the people.

    He said this was a challenge to enjoyment of uninterrupted power supply in the country.

    Oduntan listed other challenges facing power sector to include regulations, government’s failure to fulfil promises to investors, gas shortage and energy theft.

    “When there is no gas, there is no power; when there is less gas, there is less power.

    “So, gas is a problem, transmission is a problem, government is a problem and consumers are also problems,” Oduntan said.

    The director noted that South Africa, with 57 million population generated 41.19 megawatts while Nigeria with over 180 million generated about 5000 megawatts.

    “If there is no electricity, there will  not be enough jobs in Nigeria.

    “We are not serving well; we need to step up our game and do better,” he said.

    According to him, Discos know that provision of transformers, wires, cables and poles are their responsibility, but there are challenges in meeting demands of the consumers.

    The director condemned power theft and huge indebtedness by consumers.

    He urged people to expose power theft around them, as others end up paying for the theft.

    On meters, Oduntan said that every  household is entitled to one, either prepaid or postpaid.

    He urged the people to exercise patience.

    The director advocated synergy among critical stakeholders and government agencies on power.

    He said that if government, NERC, Gencos and Discos fail to work together, there won’t be power.

    Also speaking, Dr Joy Ogaji, the Executive Secretary, APGC, noted that 27 Gencos had been licensed by NERC to generate power.

    She said that that the companies had the capacity to generate more than 40, 000 megawatts.

    Ogaji delivered a paper on “Gencos, the Unseen hands in Electricity supply chain – The good, the bad, the ugly and future”.

    She said that the major challenge was the transmission of the power to consumers.

    According to her, the Gencos have been generating between 7000 and 8000 megawatts, but could not get to the consumers due to poor transmission network.

    “There has not been investment in the distribution.

    “The transmission company cannot take more than 5000. The Gencos have the capacity to give Nigeria up to 40 000 megawatts, but there is no network to transmit them.

    “We have enough power. There is no avenue to pass it across to the people.

    “Gencos are up to the task and have even exceeded the power target given to them.

    “Government also must keep promises. I agree that in the next five years, Nigeria cannot get to its Eldorado’s in power supply,”Ogaji said.

    A University teacher, Dr Yemi Oke, delivering a paper on “Expository Analysis of Electric Sector Reform Act, 2005; the Rights of Consumers and Obligations” said that electricity consumers were protected under the law.

    Oke, an Associate Professor of Law, Faculty of Law, University of Lagos, said that Nigerians had a right to electricity, a right to properly installed and functional meters and a right to transparent electricity dealings.

    According to him, electricity services consumers have a right to report when over-billed and contest any electric bill.

    “It is criminal to use electricity and not pay and it is fraudulent to pay for electricity not used.

    “The challenge of power is not that of Gencos or Discos alone, but all.

    “Gas is a problem. The law is problematic. The sector is now over- regulated,” the don said.(NAN)

  • When electricity becomes church testimony

    Social problems confronting Nigerians are expressed in different social spaces: churches, mosques, beer parlours, stadium, recreation centres and schools to mention just a few. In these spaces, Nigerians share palatable and unpalatable life experiences confronting them. The church has become one of such space where life stories are told and right or wrong attributions are made. And it is funny how religious instrumentalism enters Nigeria’s governance failures. Does God supply electricity? Church programmes are organised or structured in different ways but virtually all churches make out time to accommodate testimonies. By allowing this, the pastorate of the church utilises the shared testimonies to justify their calling and to provide evidences that God is working in that church.

    The assistant pastor in a church I attended invited this young man to give his testimony. Hear him: I was glad when they said unto me let us go into the house of the Lord. I want to thank God for making me to be alive….I also want to thank God that for several weeks there was no light (electricity) but before coming to church this morning, we had light. Praise the Lord! You will indeed praise the Lord with him when you know how this critical asset holds the key to unlocking many livelihood challenges confronting Nigerians, particularly the hoi-polloi.

    Central in this testimony is the problem of electricity. Although he could not go into the details of how non-availability of electricity has affected his life chances during the short time allocated to him, the sociologist in me observed the mood of the congregation alongside their verbal and non-verbal responses. It was least expected as a testimony since many Nigerians lack of electricity has become a culture passed across to the new born who join in shouting UP NEPA! when power is restored for few minutes. There is nexus between poverty and electricity. There is a nexus between electricity and productivity. There is a relationship between electricity and employment/unemployment. To underscore the importance of ‘light’, the creation of the world by God did not commence until there was light. The beginning of humanity was without form and ugly without light. Little progress was made until there was light. As documented in Genesis, no creation was made without light—every creation made by God came after he saw that it was beautiful.

    Light (electricity) is crucial to the making of healthy citizenry and economy. Consider how many companies have folded up because they incurred more cost in trying to generate power and they cannot sell what they produce beyond what the people will buy. Unable to break even in Nigeria, they migrated to other African countries where there is power and cost of production is less. The implication of that is unemployment. When breadwinners are out of jobs, then all their dependants are plunged into the debilitating consequences of job loss. Power is also central to the conduct of research and teaching. Nigerians universities are not even funded enough to undertake researches that will make ivory towers power independent. Go to universities in Nigeria, teaching and research are executed through generators. The noise pollution makes teaching terrible and assimilation is disrupted. Like the larger pool of Nigerians, students and lecturers go about with their phone chargers and struggle to get to the socket when power is restored in the course of lecture! Students protest against epileptic electricity supply because they can’t study or get water to take a bath. Business concerns are forced to go on inverters. The customers whose salaries have not been increased since 2003 pick up the huge bills of government failure! And yet we wonder how we arrived at the exalted position as the poverty capital of the world where the richest man in Africa domiciles?

    Prominent on the 2018 Nigerian budget is millions of naira earmarked for maintaining generators! Even the Ministry of Power, Works and Housing is unsure of having power as it allocated millions for generator maintenance! The presidency, National Assembly, state governments run on generator as authentic power supplier while publicly generated power is a substitute. Pepper grinders in my youthful days operated on electricity but that is not the story under democratic Nigeria. They are permanently on generator grinders while customers bear the high cost for grinding. Those who cannot afford generator-powered grinders are out of business and face the consequences—lack—poverty.

    We see, therefore, that the social-economic binaries of Nigerians into the governors and the governed; haves and have-nots; and the real and ordinary Nigerians, indicate that just like actors on the social world who play different roles, social realities is differentially experienced. Everyday tensions and encounters which ordinary Nigerians faces only exist in the sufferers’ imaginations as such do not exist in the world of real Nigerians. To the real Nigerians who are members of the ruling party, either at the national or sub-national level, APC or PDP, APGA or ADC, any reality which touches on the challenges facing the masses are either denied as non-existent or technically neutralised as sponsored by the opposition. Political denial of existential problems by key political and public office holders is the reason why we are still where we are: battling troubles which many serious countries with responsible leadership had solved decades back. This is our reality; this is Nigeria. Unfortunately, reality, for Nigeria rulers, is only a reality when the colonial homeland says so. That is, poverty is real when it comes from the mouth of Theresa May, and poor funding of education and health sectors by the Buhari Administration is real when Bill Gates says it.

    At this moment, President Muhammadu Buhari who is seeking re-election does not know where power is. If electricity supply has improved, how come government still budget that much for alternate supply? Nigerians are asking the ruling party to provide electricity. Light is key to making our lives better and reducing the population of Nigerians currently held captive in the cave of poverty. The faces of over 20million unemployed, over 4million peoples who lost their jobs in the last three years, the millions of unpaid civil servants and over 90million suffering Nigerians are ugly. Only those ruling have beautiful faces. Until the problem of electricity is fixed and current budgetary allocations made to service generators are channelled to more life-changing issues, poverty will continue to win more souls. God ensured that we have greater visibility during the day and lesser darkness at night because of the expected productive activities during the day. But in Nigeria, reverse is the case—longer darkness and less light.

    When shall we get to the end of the tunnel to see the promised light? When shall we stop shouting up NEPA!? When will Nigerians stop using restoration of electricity as testimony in churches? When will the ruling class whose cronies make billions through generator importation and merchandise allow the greater people of Nigerians experience greater happiness?  Nigerians need to negotiate this with aspirants ahead of 2019. Otherwise, praying to God to restore electricity, a misdirected payer point, will not cease from our mouths.

     

    • Dr Tade, a sociologist wrote this piece via dotad2003@yahoo.com

  • TCN eyes 20,000megawatts of electricity, says CEO

    The Transmission Company of Nigeria (TCN) has pledged to increase its production to 20,000 megawatts  by 2021.

    Its Managing Director/CEO,  Mr Usman Muhammed, gave the assurance while speaking on the sidelines of the installation of a 1×60 MVA transformer at the 132/33kV Transmission Substation in Akure.

    The capacity of the substation prior to this installation was 120 MVA.

    The additional transformer has raised the capacity of the substation to 180 MVA, with many communities in Akure and its environs expected to experience a remarkable improvement in power supply.

    Mohammed said the installation of the transformer is in line with the policy of the Federal Government to expand and stabilise electricity in the country.

    He said  the Federal Government aims  to provide “operational flexibility and reliability in delivering bulk power to distribution companies, international customers as well as other customers connected directly to the national grid”.

    According to the News Agency of Nigeria (NAN), the company is implementing the Transmission Rehabilitation and Expansion Programme of the Federal Government in line with international best practices.

    He said: “The installation will also increase the total wheeling capacity of TCN  which was 7,124Mw when it was last simulated in December 2017, and I can assure you that we have resolved all bottlenecks confronting effective service delivery.

    “Currently, the Akure 330/132/33KV Substation is about 95 per cent completed. This will eventually add another 120MVA to the existing capacity in Akure.

    “I visited the station yesterday and I can confirm that it is one of the best in this country.”

    Mohammed stressed that the installation of the 1X60MVA transformer in the Akure 132/33KV substation would lead to a remarkable improvement in power supply in Akure metropolis and its environ, including Igbara-Oke, Oba-Ile and Iju/Ita Ogbolu.

    The TCN chief, however, noted that the massive investment in the sector would not lead to significant improvement in the country unless the distribution companies also invest in rehabilitation and expansion of their networks.

     

    “I wish to use this occasion to call on the distribution companies to invest in their network so that the massive investment by TCN and generation companies can lead to economic growth and development of Nigeria,” he said.

    In his remarks at the event, Gov. Oluwarotimi Akeredolu appealed to distribution companies (DisCos) to ensure that they metered all consumers of electricity to avoid the rift between their staff and customers.

    The governor said that if all consumers were provided with a meter, they would control their electricity use and this would  reduce grievances with DisCos.

    Akeredolu, who said power was a critical requirement for economic growth, noted that its impact on education, health and other facets of life could not be quantified.

  • Protecting electricity consumers’ right under the law

    On May 15, last year, the Nigeria Electricity Regulatory Commission (NERC) announced that it had received directives from the Minister of Power, Works and Housing Mr Babatunde Fashola, declaring categories of eligible customers pursuant to Section 27 of the Electric Power Sector Reform Act 2005 (EPSR).

    This announcement has received applause in some quarters as the panacea to the lingering power problems in the country.

    The substance of the Minister’s declaration is to the effect that certain categories of consumers were now free to purchase power directly from the generation companies without going through the distribution companies. The classes of eligible consumers are listed below:

    • A group of end-user customers registered with NERC with monthly consumption above 2MW and connected to a metered 11KV or 33KV delivery point on the distribution network of an electricity distribution company;
    • End-user customers with monthly consumption above 2MW and connected at 132KV or 330KV on the transmission network;
    • End-user customers with consumption above 2MW and connected at 33KV on the transmission network;
    • End-user customers with consumption above 2MW and who are located near a GENCO or generation facility.

    The purpose of the directive as explained in the NERC advertorial is that it “is expected to bring into play new and stranded generation capacities which may be contracted between generation companies and eligible customers”.

    There are several issues that arise from this policy directive. What is it intended to achieve? How will it help resolve the problems currently facing the power sector? Does this enable the creation of an electricity market or only does it help to destabilise it?

    The EPSR Act has over the years been bedeviled with misinterpretation of some of the core concepts of the Reform leading to unintended outcomes that have generally impeded the success of the reform programme. The premature declaration of eligible customers once more showcases this problem. Before I go into the details, there are some questions that are burning for an answer.

    1. Did the policymakers acquaint themselves with the market design and structure before making this declaration?
    2. Did anyone reference the Power Policy document in other to understand the intendment of section 27 of EPSR?
    3. Were Sections 24, 25 and 26 of the EPSR Act reviewed or considered before the directivewas issued?
    4. What is the purpose of declaring eligible customers?

    The Nigerian Electricity Supply Industry (NESI)was designed as a three-stage market comprising the Transitional Market, Medium Term and Long Term. The differentiation of the market stages is tied to the level of development of the wholesale electricity market.

     Transitional stage

    The Transitional Stage is characterised mainly as competition for the Market (competition in the procurement or entry of new generation). The Electricity Market is open to competition for new generation entry and dispatch.  Optionally, some large customers connected directly to transmission may be authorised by the Electricity Regulatory Commission (NERC) as Eligible Customers that can buy in the Electricity Market.

    Medium Term stage

    The Electricity Market is opened to full wholesale competition with both competition to enter the market and in the market.  The number of Eligible Customers gradually increases, as authorised by the Electricity Regulatory Commission (NERC).

    Long-Term stage

    The Electricity Market is opened to full wholesale competition and retail competition.

    From the market design, the only competition to be introduced at the transition stage is competition to enter. It means that at the generation level of the business, competitive procurement of power will be introduced. Even though eligibility is an option under this stage, it would only be allowed for persons directly connected to the transmission system.

    The reality is that currently, NERC has been unable to even meet the criteria for a transition market. The market and NERC have not achieved competitive procurement of generation. If the first level of competition has proved impossible for the market and NERC to achieve, it is difficult to understand the desire and motivation for jumping to eligibility that is designed for the second stage of market development.

    What is evident from this faux pas is that the market design documents were not consulted nor did anyone seek counsel from those with historical knowledge of the electric power sector reform in Nigeria. It is unnatural to feel your way through when there exists documentation to guide you.

    I have also noticed that it would appear that those who urged the Minister to make this policy did not read Sections 24, 25 & 26 of the EPSR Act, but instead confined themselves to the provision of Section 27.

    For ease of understanding, I will reproduce the relevant portions of Section 24 of the Act;-

    “Until such time the Minister has made a declaration in accordance with subsection 3 of this section the commission shall prepare each year a report for the Minister as to the potential for competition in the Nigerian electricity supply industry and these reports shall present the Commissions analysis and recommendations as to whether the Nigerian electricity supply industry has developed to the point where a more competitive market ought to be established under section 26 having regard to:

    (a) The degree of privatisation that has occurred;

    (b) The existence of a sufficiently large number of potential competitive entities so as to avoid likelihood of an abusive market power; and

    (c) The existence of other preconditions, including the necessary metering and information technology infrastructures, required for the operation of a more competitive electricity market.

    The Minister shall present to the President and the National Council on privatization and the National Assembly each report submitted by the commission under subsection (2) of this section and when the Minister, in consultation with the President  and National Council on Privatisation is satisfied that the electricity market in Nigeria has developed to the point where a more competitive market ought to be established pursuant to section 26 of this Act, having regard to the criteria described in paragraphs (a) (b) and (c) of subsection 2 of this section, the Minister shall issue a declaration that a more competitive market is to be initiated.”

    The critical points to be taken from these provisions are;

    • NERC ought to be providing an annual report on competition, which to the best of my knowledge they have not done to date;
    • The Minister ought to be guided on market development by NERC not the other way round;
    • A more competitive market requires certain pre-conditions to be met;
    • The Minister’s actions and directives in relation to market competition must be taken in consultation with NCP and the President (and there is no indication that either the NCP or the President have been consulted on this).

    Further, one of the critical factors to be considered in moving to a more competitive market as explained in the Electric Power Policy 2001 is that conditions in Para 4.4 have been met and then competition can be introduced without threatening the financial viability of the main participants in the system.

    It is easy to assume that neither the Minister nor NERC was acquainted with the market design and therefore they were easily misled on the appropriateness of declaring this level of eligibility in the Transitional Stage of market development.

    The Minister’s actions are in reality a declaration of a more competitive market without even meeting the conditions of operating the transitional market. The policy document on eligible customers does not say what benefit is accruable to the industry or consumers from this policy save for the scant reference to stranded and new generation.

    The concept of eligible customers was introduced in the industry design as part of competition-enhancing mechanisms when the market had reached a certain level of maturity.

    Eligibility does not reduce market illiquidity nor does it cure payment delinquency. It does not improve the transmission system nor does it improve the financial viability of distribution companies. Indeed if the declaration is anything to go by, the eligible customer will have to rely on the transmission system and distribution network that has been found inadequate to ‘Bluetooth’ its eligible power to it.

    NERC and the Minister have failed to consider that electricity distribution is a volumetric business and the end user tariffs in the sector are currently being subsidised by the class of consumers it has boldly declared eligible. Neither the government nor NERC has demonstrated an appetite to allow the tariffs free float to cost reflective levels. It remains to be disclosed who will pay the differentials that will occur if these class of consumers are indeed removed from the revenue base of DISCOs.

    Despite my reservations about the declaration of eligibility at this stage, it would have served the industry better if the Minister had confined the category he opted to make eligible to that referenced in the market design for this stage, i.e. consumers directly connected to the transmission grid. As unnecessary as this may be at this stage, it would at least not distort the market design.

    Weakening the distribution companies by removing the easier to serve customers does not in any way address the problems that have hindered improved power supply in Nigeria. The ‘cherry-picking’ policy currently being pursued is at first glance only one of the many acts that point to outcomes that will benefit private interests to the detriment of the national interest. Investments will not come to the industry as long as the market returns remain in the negative because of government’s inability to provide sustainable regulations. By looking for quick-fixes, the policymakers only succeeded in introducing more volatility into an already volatile industry’s revenue and operating environment.

    The solution to challenges being faced by consumers and operators are well known. The current approach by the ministry and the regulator that has been subjugated by it only symbolises an ostrich solution.

    It is incredible that since writing this, the Ministry of power has come out with even more destructive policy directions. I will comment on them later.

     

    • Ojukwu is a utility regulation specialist.

  • Why Okpella, Urhonigbe communities are without electricity

    Okpella and Urhonigbe communities are located far apart in Estako East in Edo North and Orhionmwon in Edo South respectively. They are communities that housed vital companies in the state. Okpella is home to BUA cement factory because its huge limestone and mineral deposits. There are other small cottage mining firms located in Okpella.

    Urhonigbe has the largest rubber plantation and a huge forest reserves. A new firm managing the rubber plantation, the Rubber Estate Nigeria Limited is investing about N5.1billion to boost rubber production in the country. The firm has planted new rubber plants.

    Both communities however have something in common. They don’t have electricity supply. Both communities are in absolute darkness as the Bénin Electricity Distribution Company has since disconnected them over huge debt.

    The non-availability of electricity has crippled business activities in both communities that the residents have to pay to charge their phones at business premises using generator.

    Okpella has been without electricity since December 2017. Management of the BEDC cut the community off over alleged N170m debt. It was gathered that after an initial imbroglio over non-payment of electricity bills, the community leaders and BEDC management entered agreement for the community to be paying N21m monthly for power supply.

    In Urhonigbe, the situation is worsen as the community was cut off for over six years. Ahead of the 2015 general elections, the community was connected but disconnected after the elections over non-payment of electricity bills.

    A resident in Urhonigbe who gave his name as Osaigbovo said the BEDC is asking them to pay the sum of N30m and it is difficult for them to raise money.

    Managing Director of BEDC, Funke Osibodu, told reporters in Bénin City that the firm expected communities to pay for electricity consumed.

    Osibodu explained that representatives of Okpella community brought a N7 million cheque issued by BUA cement instead of N21m agreed to be paid monthly. She stated that the monthly N7m payment continued until the balance bill rose to N170m.

    According to her, “No customer in Okpella wants to pay electricity bills. They depend solely on BUA Cement. We cannot continue to them power when they have not paid for the power consumed.

    For Urhonigbe, She explained that the then Governor assisted to connect the community but members of the refused to pay bills.

    “When we give you power, you must pay. If you owe bills, naturally you don’t have power.”

    But a resident of Okpella, Magnus Philip, said the continuing perpetual darkness in Okpella since 16th December 2017 was alarming and a call for every sons and daughters to wake up to their responsibility.

    According to him, “It is hard time. We have to challenge it. So many businesses have been crashed down due to this singular act of impunity. How long are we going to sit down watching our light gradually disappearing like a vapor? “

  • ‘600m have no electricity in sub-Saharan Africa’

    Global law firm, Hogan Lovells, has said about 600 million people in sub-Saharan Africa have no access to electricity.

    This is contained in a new report published by the law firm entitled: “Africa and Renewables: Wholesale Change or Short term surge?”  launched at the African Energy Forum in Mauritius.

    The report was compiled with input from the firm’s partners and many of its clients, spanning infrastructure, energy, finance, and private equity. The report highlights the challenges posed by producing and accessing renewable energy in Africa, and how these can be overcome to achieve potential and scale.

    In sub-Saharan Africa, approximately one-third of the population (about 600 million people) has no access to electricity, with demand outstripping supply due to increasing life expectancy driven by greater access to healthcare, increased urbanisation, and technological advances. The estimated investment needed is $50 billion yearly, the report said.

    The report also highlighted the potential for renewable energy production to revolutionise access to energy throughout the continent. Africa has vast potential to tap into its natural abundance of hydro, solar, wind, and geothermal energy sources, while the technological and financial hurdles to achieve major energy breakthroughs are increasingly surmountable.

  • Electricity dips by 1,087mw due to gas rupture

    THE Transmission Company of Nigeria (TCN) yesterday said that the Nigeria Electricity Supply Industry (NESI) lost 1,087Mega Watts (MW) owing to gas pipeline rupture and challenges with Shell gas wells.

    The situation, according to TCN General Manager, Public Affairs, Ndidi Mbah, culminated in load-shedding nationwide to stabilise the grid.

    The statement noted: “As a result of gas pipeline rupture on June 15, 2018, as well as technical issues at the Shell gas wells on June 16, there has been a sharp drop in generation into the grid by a total of 1,087.6MW, resulting in load-shedding nationwide, necessary to maintain stability of the grid.”

    It added that due to the Nigeria Gas Company incident, six thermal power generating stations have been unable to generate electricity and have therefore been shut down.

    The affected power stations, TCN said, include Ihovbor, Azura, Omotosho gas, Geregu gas, Olorunsogo gas, Sapele and the Egbin Power Station, which has managed to generate 60MW only on each of its units, losing a total of 211MW.

    Also, Afam VI power station was shut down to allow Shell Oil Company resolve its gas well issues to enable it begin gas supply to Afam VI power station.

    The statement said: “With a total loss of 1,087.6MW into the grid, the transmission system has become quite fragile and TCN is working hard to avert a collapse of the system, by engaging in load-shedding.”

    Load-shedding, the agency explained, is to ensure that available generation is commensurate with what is allocated to discos nationwide, to create a balance and avert grid instability.

    The statement noted that NGC is making efforts to ensure that the gas pipeline issues are resolved to restore normal gas supply to the affected power generating stations and to enable them generate into the grid.

    But it was gathered that Shell resolved its gas well issue yesterday morning and gas supply was partially restored to Afam VI.

    TCN noted that there has been no collapse of the grid as reported.

    It appealed for understanding and assured that its engineers are working hard to continue to maintain the stability of the grid, pending completion of repairs of the gas pipeline by NGC and restoration of full gas supply to the affected generating stations.

     

     

  • Electricity: Group supports bill criminalising estimated billing

    Apparently miffed by what it described as “a wicked ploy” to fleece unsuspecting members of the public of their hard-earned money, a group under the aegis of the Coalition for Affordable and Regular Electricity (CARE) has appealed to the National Assembly to expedite action on the proposed bill that seeks to criminalise estimated billing in the electricity sub-sector.

    In a statement issued on behalf of the group by Chinedu Bosah, Coordinator and Monsuru Shoyombo, Secretary, and made available to The Nation, the duo who fell short of accusing Babatunde Fashola, the Minister of Power, Works and Housing and Mr. Dafe Akpeneye, a Commissioner in the Nigerian Electricity Regulatory Commission (NERC) of alleged criminal conspiracy queried why the latter should be opposed to the bill that criminalising estimated billing at the public hearing at the National Assembly.

    In the statement which reads in part, the group said: “Fashola and Mr. Dafe have shown clearly that the federal government is in an unholy alliance with the electricity distribution companies (DisCos) to continue the robbery of electricity consumers through fraudulent estimated billing.”

    Expectedly, the group called on other pro-people organisations, Nigeria Labour Congress (NLC), Trade Union Congress (TUC), United Labour Congress (ULC) Socialist Party of Nigeria (SPN), community development associations (CDAs), Joint Action Front (JAF) to join forces to resist the continued unjust billing of electricity consumers based on estimation, struggle for issuance of prepaid meters to all and for uninterrupted/affordable electricity to all Nigerians.

     

  • The challenge of estimated billing

    The best way to ensure the balance between the energy supplied and what an electricity customer consumes is to install a meter. And such a metering device can be either pre-paid or post-paid.

    Estimated billing occurs when a customer does not have a meter. Generally, no electricity distribution company (DisCo) makes estimated billing its default billing system. However, a review of electricity utility billing practices, world-wide, would indicate that estimated billing is a standard and conventional tool that is in much use, even in advanced economies.

    In the case of Nigeria, the current metering gap of 4 million customers (2.35 times the 1.7 million metering gap specified in the DisCos’ performance agreements) goes back several years, long before privatisation and we cannot blame the DisCo investors who only took over in November 2013 for the growing historical metering gap.  As a matter of fact, the National Pre-Paid Metering Program (NPPMP) initiated by the federal government, prior to the privatisation, sought to address this gap but failed, due to corruption, lack of coordination, inefficiency, etc. The failure to complete metering of customers prior to the privatisation was worsened by the absence of data on the total number of registered customers, now estimated at 7.47 million (likely still an underestimation of the number of customers, with the associated outcome of an even larger metering gap).

    Consequently, the huge metering gap in Nigeria presents a herculean challenge for the DisCos when it comes to measuring the consumption of their unmetered customers. Significantly, there is no more interested party in the comprehensive metering discussion than the DisCos.  And this is because it is estimated that metering alone reduces collection losses by 30 percent. Additionally, it minimizes the alienation of consumers who, often, underpay or do not pay their electricity bills, based on the disputed or crazy bills.

    In recognition of the impossibility of comprehensive metering within the near to mid-term period, the regulator, the Nigerian Electricity Regulatory Commission (NERC) enacted a regulation on Estimated Billing Methodology to guide the DisCos in their billing. Nonetheless, application of the methodology remains a very contentious process, as we have seen cases of over-billing (otherwise known as crazy billing) and cases of under-billing which, we, the consumers never talk about. Understandably, estimated billing is a vexing issue to un-metered customers, due to the perception of overbilling situations.

    In all, I’m of the view that it is very unfair and difficult for both the consumers (in the case of crazy billing) and for the DisCos (in the case of under-billing). The estimated billing regulation provides for fair parameters and indices for the computation of electricity usage for unmetered customers.

    Most times estimated billing is calculated based on the level and quantity of supply in any area and not necessarily driven by collection targets as it is widely believed. For instance, supply in close neighbourhoods may vary due to the type of supply lines and sources, i.e. 11KV lines to 33KV lines, illegal connections, inefficient use of energy. Hence billing would be based on quantity supplied to those neighbourhoods, irrespective of proximity. Still, there is no doubt that the current methodology is convoluted, counterintuitive and not transparent.

    The question to be asked is; how did we get here in the first place? Alas, the power sector was neglected for an extensive period. The metering gap continued for several years unabated, yet we expect miracles within five years of privatisation.  A review of other jurisdictions that implemented electricity reforms with similar metering gaps would indicate that achieving the objective of comprehensive metering is a long-term endeavour, given financial and logistical constraints.

    Regrettably, neither the metering obligation of 1.7 million meters specified under the DisCos’ performance agreements nor the investment assumption under the electricity tariff will get us to the nirvana of comprehensive metering anytime soon. The reasons for this are – a) Meters cost money and someone or some entity must pay for them.  Paying for them means that the cost has to be recovered through a higher tariff that would run counter to the affordability constraint of consumers; b) There is a practical and logistical limitation to purchasing and installing the total number of required meters in the near term; and c) While NERC has recently rolled out the Meter Asset Provider (MAP) regulation that is expected to address the metering gap, this regulation cannot be successfully implemented without consideration of a sustainable commercial framework.  In other words, any operator/provider’s access to debt financing for metering, will be challenged by the reality of a sector that is currently suffering from over N1 trillion of market shortfall and debt.

    I think that it is fair to conclude that the DisCos are not anywhere close to the level of efficiency that was envisioned under the National Electric Power Policy, 2001 (NEPP), the foundation for the subsequent legislation, Electric Power Sector Reform Act, 2005 (EPSRA). But is it reasonable to expect the DisCos to attain the desired level of efficiency, with an emphasis on metering, in an environment of regulatory and policy inconsistency, electricity theft; meter bypassing; overloading of transformers; obsolete infrastructure leading to technical losses; non-cost reflective tariff, etc.?

    Crazy billing is not and will not be acceptable now or any other day.  However, I would suggest that the challenges of estimated billing are best addressed through the prism of a transparent, hardnosed and unbiased assessment of the challenges and methodologies that either exist or that can be devised to address the emotionally charged issue of crazy billing.  For instance, the estimated billing methodology does provide a protocol for disputing a bill that is either excessive or not reflective of the consumer’s consumption pattern.  The MAP regulation is expected to bring both third party meter vendors and associated capital to further ameliorate the metering situation, and expeditiously so. The regulator will need to consider updating the estimated billing methodology to make it more transparent and user friendly, both from the operator and consumer perspective, for ease of respective determination of energy supplied and consumed.  Concerns about manipulated meters are addressed by the Nigerian Electricity Management Service Agency (NEMSA), as part of its mandate to ensure efficient electricity billing and measurement.  NEMSA remains committed to ensuring that only high quality and properly calibrated meters are installed across Nigeria.  Every allegation of meter resetting or fraudulent calibration by DisCos operators is promptly investigated by NEMSA.

    An efficient electricity market is, and continues to be a defined outcome of the power sector reform effort. The elimination of estimated billing, largely, is one of the expected outcomes for an efficient market.  However, attainment of this efficiency is also predicated on other factors such as appropriate electricity pricing, increased generation, efficient regulation, forex availability, consistency of regulation and policy making and implementation, favourable lending terms, and other macro-economic dynamics that, unfortunately, have been absent to date.  Nigerians are anxious to witness a growth in the power sector. Such growth or progression, coming from a background with an order of magnitude of deficiency and inefficiency in the power sector caused by historical neglect, will require an associated order of magnitude of investment, commitment, focus and patience, for its turnaround.

     

    • Prof. Oke writes from Abuja.

  • Exeron to aid electricity acces

    METKA, the business unit of MYTILINEOS S.A, an international engineering, procurement and construction (EPC) contractor and industrial manufacturing group, has brought technology that boosts access to power.

    The technology called Exeron is a unique and innovative power conversion system that provides reliable power in non-electrified regions and unreliable grid locations.

    A result of the combination of resources and expertise of METKA and International Power Supply (IPS), Exeron is considered the most advanced hybrid off-grid system, delivering uninterrupted output of power through intelligent control of various energy sources, including solar panels, wind turbines, the electrical grid, and/or diesel generators.

    Anita Otubu, Head of Special Projects, Rural Electrification Agency (REA) said: “Our sole mission at the REA is to provide access to reliable electric power supply for rural dwellers, and the launch of Exeron in Nigeria is a welcome development as it would contribute significantly to the realisation of our objectives.”

    On how the system works, METKA Project Director, Dimitrios Triantafyllopoulos, said: “Exeron intelligently combines various power sources with battery storage to reliably provide baseload power. Battery banks are used to store energy for later use at nighttime, for peak shaving during daytime or to provide resilient energy to the load during grid outages. It is an affordable and efficient solution suitable for a wide range of applications, including residential, industrial, oil and gas, telecoms, defence and security.”

    METKA West Africa Operations Manager, Emmanuel Elegbe, said: “Exeron is an energy management system. As such, no costs and time are needed for integrating parts from various manufacturers. The system comes pre-configured from the factory, allowing for quick and easy installation.

    “In addition, the intelligent battery management system is able to extend the life of the storage system up to 30 per cent. And because the system’s modular architecture allows load sharing between modules, the output power remains unaffected in the rare case of failure. Another key advantage of Exeron is that the modular system can easily be scaled up to meet tomorrow’s energy needs; power upgrade takes just a few seconds and no tools are needed.”

    Off-grid applications represent a quickly growing segment of the global power solutions market, and Nigeria is no exception. To this end, the Federal Government instituted the Rural Electrification Fund to enable more private sector participation in power projects such as grid extension, interconnected mini-grid, isolated mini-grid, isolated micro/nano grids and stand-alone systems. A minimum of $10,000 (N3.5million) and maximum of $300,000 (N106million), or 75 per cent of the total project cost, whichever was less, could be given as grant.

    METKA IPS is well positioned to meet the challenges of the rapidly growing hybrid and off grid power market, serving the needs of customers in Nigeria and around the world with affordable and efficient solutions, Elegbe said.