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Tag: Electricity

  • Residents, business owners decry continuous power outage in FCT

    Residents, business owners decry continuous power outage in FCT

    Some residents and business owners in Bwari Area Council of the FCT, have decried the continuous power outage in the area by the Abuja Electricity Distribution Company (AEDC).

    The residents, who spoke in separate interviews with the News Agency of Nigeria (NAN) on Thursday in Abuja, said that the situation was not only causing discomfort but crippling economic activities in the area.

    Mr Ayu Johnathan, one of the residents, said that inconsistent power supply to homes and business areas, especially with the current weather and economic challenges, was too much discomfort.

    He added that consistent power outage may cause small businesses to fold up, while adding that some businesses that needed constant power might no longer function properly.

    According to him, the weather is already too hot and everyone may want to enjoy the breeze from a fan or an air-conditioner while indoors, especially after a long day from work or hustle, but no light.

    “While some may get it for an hour or more, some areas do not even get it for a day or two.

    “Some areas get for just few minutes and it is gone, and this is not good, especially for those in the commercial areas where stores with frozen foods, blocks and the rest are sold.

    ”They require power to process and store these produce.

    “It was not like this last year, at least there was an improvement from the power company but since this year, everything seems different and if it continues like this, it may cripple businesses.”

    Johnathan, therefore, urged the Federal Government to look into the epileptic power supply in Abuja, the nation at large and find a lasting solution to the issue.

    Similarly, Mrs Ronke Adewunmi, a store owner in Bwari town, said that it was unfortunate that the situation was happening amid the high cost of fuel.

    This, she said, had cost lots of business owners’ losses as some could not afford to switch to their generator sets, while those who could, hike their prices.

    ”This power outage, slowed down my business, because everyone wanted cold drinks some days ago in large quantity and I didn’t have any to sell.

    “If I have to buy fuel to power my generator, I may have to increase the price of drinks and people may not buy much because not many can afford it.

    “It is unfortunate that now that we are on prepaid metre, we don’t get light constantly like before and we need it for our businesses.

    “I won’t make profit if this continues, I am not happy at all, no light at home not my shop, it’s disheartening”, she said.

    She added that relevant stakeholders must work speedily towards restoring power to communities in the area, to discourage robbery attacks and other criminal activities during the night.

    Similarly, Mr Matthew Onoja, another resident and business man, also said that government needed to put more effort into providing better power supply, especially with the incessant hike in power tariff.

    He said it was only logical for the people to get value for the services they pay highly for and at all times.

    “The whole of yesterday, I was not able to achieve anything in my office because of this power outage. I work in a cyber cafe and this power outage really affected us yesterday.

    “With light, our customers have access to all our computers but with generator, we can only use three or four because that’s the much it can carry, so yesterday, we didn’t make much profit.

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    “Since the days of our forefathers, power has always been issues in this country, even making other African countries make fun of us for our inconsistent power generation.

    “The government should do something about this, it is not about increasing tariff every time; at least let us see what we are paying for, and then we will not grumble if it increases again.

    “I even came to work wearing rumpled clothes today and it is not nice at all, “Matthew said.

    In another development, residents of Masaka in Nasarawa State have also called on the government and relevant authorities to rectify issues surrounding the over one month power outage in the area.

    A business woman, Mrs Elizabeth Ehizo, said that power failure in the area had slowed down her business.

    According to her, there has been no power supply for months now. We have been buying diesel for our business and the cost of diesel is very high and as a result of that we do not make profits again.

    ”The price of cold sachet water before now was N250 per bag but it is now sold for N500 because of this issue of power. We sell to retailers at the rate of N450 but customers are still complaining.

    “How do we remain in business if we don’t bring the price up? We want those concerned to come and help us as we cannot continue depending on diesel for businesses.”

    Miss Joy Joseph, a supermarket owner, while expressing worry over the lingering situation, said that the power outage had affected her business drastically and she could no longer meet up with sales.

    According to her, it is almost impossible for me to have cold drinks and water for sale and my customers are complaining.

    ”Ice block is now expensive; I buy one ice block for N1,500 to cool the water and other drinks and still run at a loss after selling them.”

    Joseph, while appealing for speedy solution to the unfortunate situation, urged government to improve on the power system and ensure that policies meant to improve on service delivery to consumers were achieved.

    Meanwhile, another resident, Mrs Olaitan Awoso, a hairstylist, said that she had lost patronage in her salon due to lack of electricity in the area.

    She said that the situation was becoming unbearable for business owners who needed power to render their services.

    ”The price of washing and drying hair before was N500, but now it is N1, 200 and our customers are complaining. Most of them now buy shampoo and wash their hair themselves at home.

    “This is not good for us. We need to do better as a government.  People will appreciate it more if they see the light before they can pay for it or even at least , enjoy what they paid for,” she said.

    Awoso, prayed for a divine intervention in the system, while also praying that the government, listened to the plight of the people by bringing succour to the entire economic challenges.

    (NAN)

  • Burden of an ill-conceived electricity tariff increase

    Burden of an ill-conceived electricity tariff increase

    • By Sunday Onyemaechi Eze

    Nigeria is a nation with a long history of perennial challenges of public power supply. The country seems to have unfortunately accepted the anomaly as part of its national life. Since one came of age, the power sector bears the trade mark of inefficiency. The problem of insufficient power supply has remained unchanged. The old reasons adduced for poor performance in the sector more than two decades ago are not different either. Despite the poor supply situation, citizens still pay through their noses for an underperforming power sector which delivers little or no quality services. Many Nigerians cannot remember a time when they enjoyed constant public power supply up to 15 hours per day. A lot of money has been spent and much more is still allocated to the power, sector but no remarkable progress has been made.

    What ordinary Nigerians constantly experience is poor service outcome, routine tariff increase and general inefficiency. The latest assault on Nigerians is the announcement of new tariff regime and classification of customers, currently placed on new categories of bands A-E. The citizens had no input when decisions were taken on this band classification. Effective from April 3rd, the charges of selected customers on Band ‘A’ has increased to over 300 percent. Days after, the Federal Government has hinted on extending similar measure to other band categories.

    The unit cost of electricity for those placed on Band A was jacked up from ₦68 per kWh to ₦225 per kWh excluding VAT. Those on other bands are denied electricity supply in a failed attempt to meet up with the obligation to band A customers. The prevailing lie in government circle was that the increment only affected a small percentage of Nigerians and that government still subsidises electricity. Officials implementing government policies are often economical with the truth regarding the impact of anti-people policies. In this case, the only thing that matters to them is saving without considering the economic impact of such savings on the well-being of the people.

    Government failed to understand that industrial customers whether big, medium or small placed on Band A will factor in the cost of fuel, diesel and the increase into the prices of the goods and services they provide. Therefore, whether customers are placed on Band A or other categories with or without electricity, the burden of every company’s expenses is transferred to the ordinary people, namely the customers/consumers.

    When will government concede to the mood of the nation and inputs of the masses before taking any decisions on issues directly affecting them?  Pundits say the band idea is a ploy to assist the cash-strapped Discos to raise fund. This is happening in a country where power outages last more than 24 hours daily or even days in most places. It is also happening in a country where the national power grid had collapsed more than 58 times between 2017-2023. How could government remove subsidy on electricity, but goes on to subsidise hajj fare to the tune of over N90bn? Is Nigeria ready to move from a poor nation to a developed one?

    Read Also: Simple ways to check your electricity tariff Band

    Nations occupying the front row in industrial growth and development attain such feat with serious investment in power supply. There is no gain saying the fact that, access to uninterrupted public power supply has become a tall dream in Nigeria. The more money is spent on the sector, the worse it becomes. Bogus contracts entered into by government with industry players like Siemens to remedy the situation has suffered several set-backs, and the end is not yet in sight. The long wait for remedy continues while government officials have often admonished citizens to keep hope alive. Both past and present governments do not seem to have a grasp of the fundamental problems bedevilling the power sector. If they do, Nigeria cannot be shamelessly talking about 4,500mw of electricity since 1960.

    One major problem facing the sector is the appointment of people without requisite knowledge and experience. The endemic corruption in the sector and lack of purposeful goals have also contributed to the obvious failure. Almost all ministers of power since 1999 except Engr. Bello Suleiman were/are square pegs in round holes. They were/are green horns occupying compensatory political positions earned on recommendation or political party affiliation. As novices, they come on board bereft of ideas or blueprint to drive government agenda. It is a disservice appointing an accountant or a lawyer as minister of power.

    Policies often put in place by these appointees to address the challenges are mostly badly thought out, externally influenced or geared towards inflicting more pains. Since year 2000, tariff increase has been the only visible item dominating and governing the Multi-year Tariff Order (MYTO) while other germane issues like customer privileges are relegated to the background. In fact, Nigerians wake up to multiple tariff upward reviews every two to four years without additional power infrastructure to support the aging ones or addressing the needs of several rapidly expanding communities.

    There is no home grown solution to the intractable problems of power except borrowed directives handed down by World Bank or the International Monetary Fund (IMF). These borrowed ideas deepen and worsen the economic woes of the poor citizens. A country where little children always jump up in excitement and shout “Up Nepa!” when public power supply is restored after days of blackout has no business increasing the cost of electricity or services not adequately rendered. Those in charge should go back to the drawing board, comprehensively work hard to improve on the sector instead.

    The power sector was painfully balkanised, claimed and annexed in favour of some highly placed individuals just like the Europeans did to Africa in the 1885 Berlin Conference. The companies were shared as business status symbol serving the interest of a few. Provision of excellent services for Nigerians was secondary on the power sector reforms agenda. How could a country allocate such all-important national asset to incompetent, non-experts in government or their associates whose interest only hinges on making quick money. The Nigerian bidding system is so magical that one wonders how these ill-prepared investors schemed their ways through the processes without anybody flagging their glaring incompetence. The process deliberately accorded certain privileges to bidders/owners who cannot differentiate between a fuse and feeder pillar. 

    The country should as a matter of urgency innovate and diversify in areas of power generation. This could be regionalised based on the corresponding resources within every geographical zone. The Northeast is blessed with potentials in solar energy. The Northwest is endowed with the blessings of hydro-electricity and wind. The Northcentral can boast of a good level of coal deposit and resources for hydro-power supply. The Southeast is blessed with little water, gas and abundant coal deposit. The Southsouth and Southwest have resources in hydro-power and gas. The world is going green and Nigeria has to run with the idea together with the world.

    Unfortunately those at the helm of affairs and friends of people and institutions close to the corridors of power have only succeeded in allowing the sector to thrive, but generally restricted it from flourishing. They have succeeded in bringing the sector down on its knees and resorted to untenable ideas and prescriptions not peculiar to Nigerian circumstances. With the enormous human and financial resources invested in the power sector, after 63 years of existence, Nigeria has no business being in the league of nations lacking adequate power supply.

    This electricity tariff increase is ill-conceived and equally ill-timed. It should be halted. Let Nigerians breathe.

    • Sunday Onyemaechi Eze, a Media and Development Communication Specialist, writes via sunnyeze02@yahoo.com.
  • Electricity, like gasoline, like food

    Electricity, like gasoline, like food

    When the Minister of  Power, Adebayo Adelabu, revealed the other day that mindless consumption of electricity was to blame for the perennial shortfalls that have in turn necessitated an upward review of tariffs by more than 200 percent, many an outraged consumer must have dismissed him as flippant, if not downright petulant.

    The Honourable Minister may not have realized or intended it, but he was following a long line of political officials and policy-makers who reflexively blamed the hapless victims for the privations their acts and omissions occasioned.  He is likely to go down as a successful politician.  For, in politics, nothing sanctifies like self-exculpation.

    At a time of disquiet unlike the present one in the Babangida era, his nominal deputy, Vice Admiral Augustus Aikhomu blamed urban consumers for the high food prices.  They were too lazy to repair to the rural areas where costs were lower, Aikhomu said.  And unlike that feckless breed, he volunteered, he returned to his ancestral village in the Esan country of Edo State ever so often to replenish his supply whenever he ran out of gari.

    The Minister of Agriculture, the usually well-tempered and solicitous General Alan Akinrinade, explained that the problem was not that food supplies fell short of demand but that consumers were too picky.  They would rather have a bowl of imported oatmeal than a bowl of our own home-grown, healthier, ogi or akamu.  And if the oatmeal is not available, they will carp endlessly about a shortage of breakfast cereal.

    If the same over-pampered, spoiled elite cannot snack on grilled Cornish hen, if they cannot get their favourite cuts of beef from cattle reared in Australia or Argentina, or mushrooms from the Iberian peninsula, or fish from the South Atlantic, they will be in a sour mood.  Do not even tempt them with the local equivalents or substitutes.

    Their bread has to be baked with imported wheat.  Not for them bread baked with cassava flour which one administration after another in the past three decades has designated the National Loaf. And if canned baked beans is in short supply, nothing can induce them to make a meal of the wholesome, unbaked variety that is available all-year-round here.

    Some of them are so discriminating that they will not touch lager beer unless it is brewed with water from the melting glaciers of the Arctic Circle.

    No government, not even one sworn to uphold the human rights of all citizens as Babangida’s was, could cater indefinitely to the degenerate taste of a parasitic elite, Akinrinade could have added were he not an Officer and a Gentleman.

    Much the same reasoning was advanced to justify the cutting of alleged subsidies on petroleum products.  Gasoline was obscenely cheap, so much so that you could obtain one gallon of that precious combustible for less than the price of an 8-oz bottle of soda or filtered water.  When it          was not being mindlessly wasted, it was being smuggled on an industrial scale to other climes where it was guaranteed to earn windfall profits that belong by right to Nigeria’s exchequer

    Because gasoline was so cheap, consumers purchased and pressed into service far more motor vehicles than the road network could accommodate.  The resulting wear and tear cratered the roads and the highways, endangering the lives and property of innocent road users.

    Gasoline was cheap because it was so heavily subsidized that the authorities might just as well have given it out free, especially since, as we learned only recently, the cost of producing one gallon of gasoline was $3.40, whereas the pump price was at the material time about a tenth of that amount.

    The subsidies deprived the government of the funds it could have invested in building more oil refineries, prospecting for more oil, expended on research and development, and propelling Nigeria to the ranks of the G-20.

    The remedy, they said, was to cut the subsidy bit by bit until there was nothing left to cut.  But the more they cut the subsidy, the bigger it grew., and the more remained to be cut.  The more they patched up the clunky refineries of the analogue era, the more dysfunctional their performance. But new refineries never got built.  There was only scant investment in the new technologies.  They unbundled the government-sponsored oil behemoth, the NNPC, but its spirit and its proclivities continue to animate the parts.

    Importation of refined petroleum products became the main vehicle through which the politically well-connected amassed huge fortunes by dirty tricks until President Bola Tinubu declared that enough was already too much.

    Read Also: Simple ways to check your electricity tariff Band

    Even now, they are hinting darkly in fiscal circles that those insidious subsidies have crept back into the industry again, and that they will have to be rooted out very soon.

    The narrative has now shifted to the troubled power industry that has long been notorious for  what it doesn’t supply:  electricity. 

    Those who snagged bits and pieces of the old NEPA when it  was unbundled in the hope of making fortunes have proved no more adept at generating and  distributing electricity,  Not even the most generous stakeholder will rate the industry as a supplier of light.

    The Minister of Power, Adebayo Adelabu, says the fault is in the consumers, not in the corporate providers.  Mindless, wasteful, reckless consumption is their defining attribute.  They keep their freezers powered when the contents are frozen rock-hard and will remain so for days if the power is turned off.  Their empty offices must be chilled hours before they arrive at work.

    Ditto their homes when they are away at work or out of town for the weekend.

    Even when hurricane lanterns, candles and oil-wick lamps can provide adequate illumination,            they must light up their homes with fancy light bulbs.  They have consigned the good old coal-fired pressing iron to the junkyard, and would rather use the electricity-powered variety that is a relentless juice guzzler.

    Not for them those efficient kerosene-fuelled cooking stoves, much less those squat and sturdy locally-fabricated stoves which impart the unique flavour of the blazing firewood under the pot to whatever is cooking, and can get the job done much faster than any electric variety.

    The Honourable Minister almost forgot to mention their washing machines, dishwashers, carving knives, blenders, mixers, toasters, shavers, and all such appliances powered by electricity and to insist their use carries the grave danger that indigenous expertise in performing chores in our traditional ways traditional may be lost irretrievably.

    These unconscionable habits persist, says the Minister of Power, because electricity is too cheap.  It is that cheap because it is heavily subsidized. For that same reason, there is not enough electricity to go around.

    The subsidy will therefore have to be cut and the proceeds invested in generating and distributing more power to those who claim that they cannot live without it, so long as they are prepared to pay the real cost as dictated by market forces.  Current practices, he has warned, are simply unsustainable.

    The common denominator in these three-fold crises, not forgetting the looming water crisis, is the consumer.

    Why don’t we abolish the pesky lot?

  • Electricity tariff hike: Fed Govt urged to review concession

    Electricity tariff hike: Fed Govt urged to review concession

    • NSE challenges DisCos on transparency, accountability

    Given the epileptic services rendered in the face of continuous tariff hike, the Deputy National Organising Secretary of the ruling All Progressives Congress (APC), Nze Chidi Duru, yesterday urged the Federal Government to review the concession agreement with the electricity distribution companies.

    The former federal lawmaker, who was the House of Representatives Chairman Committee on Privatisation when the power sector was unbundled, lamented the monumental failure of the sector after over one and half decades.

    The APC National Working Committee (NWC) member spoke in Abuja while chatting with reporters.

    Meanwhile, the Nigerian Society of Engineers (NSE) also called on electricity distribution companies (DisCos) to be transparent and accountable while implementing the new tariff hike.

    NSE President, Mrs. Margaret Oguntala, gave the advice in Abuja at the Quarterly Presidential Media Parley with the theme “Charting New Paths for Growth and Development through Engineering.”

    Oguntala said although the NSE was not against the tariff hike, customers should be protected and their needs met without being short-changed.

    She called for strict sanctions on electricity DisCos that failed to meet the minimum 20-hour supply.

    “Policies are made but what is the framework for implementing these policies? How effective are they in the long run?” she asked.

    “If there are no sanctions for the DisCos and you claim to be giving someone in B and A 20 hours of supply but you are not actually doing so, what happens?

    “We are saying that there must be sanctions for defaults and do you do that? Where there are shortfalls?

    “The DisCos must be held responsible which means that the metering must be very transparent.

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    “We have asked the question of what will happen during downtime when there are repairs; all these must be put into consideration for the policy to work,’’ she added.

    Duru, who described as unjustifiable the recently announced disparity in electricity tariff, frowned at Nigerians still buying transformers, cables, poles and other electrical materials for DisCos, arguing that the development has confirmed that the DisCos have not lived up to their expectations.

    Reacting to the recent hike through segmentation of consumers in bands, he lamented that the inability of the DisCos to improve the desired services in the past 15 years indicated their unworthiness and continued exploitation of Nigerians.

    When asked if the government should review the concession arrangement, Duru replied: “Yes, it has come to that. If they look at the terms of the contract the government signed with the operators and if there is sufficient reason the government should take over the agencies, DisCos and GenCos. It should be because none of them have delivered on the duties imposed on that contract.

  • Expert seeks transparency, capacity development in electricity sector

    Expert seeks transparency, capacity development in electricity sector

    An energy expert Engr. Ademola Agoro (FNSE) has called for increased transparency and capacity development in the electricity sector.

    Agoro, who is the Managing Director, Protogy Global Services Limited and Vice President, Nigeria Society of Engineers, emphasised the importance of transparency in transition of the power sector towards cost and service reflective tariffs. 

    Speaking while appearing on BCOS flagship programme, AM120, Agoro urged Nigerians to support the transition, highlighting its potential to attract investment in Nigerian Electricity Supply Industry (NESI) and unlock benefits of the new electricity act.

    Read Also: Reps to intervene in electricity tariff increase, says Deputy Speaker Kalu

    Addressing concerns about distribution companies charging customers in band A, Agoro proposed that these companies be required to sign service level agreements with individual customers. 

    He stressed importance of enforceable sanctions from regulators and implementation of transparent monitoring tools accessible to all parties involved.

    He called on government to reconsider its policy on energy subsidies, suggesting redirecting subsidy resources towards providing certain amount of energy units to tax-paying Nigerians and companies, thereby promoting equitable access to electricity.

    Highlighting issue of proper metering, Agoro urged government to prioritize efforts towards ensuring all Nigerians are adequately metered, adding that accurate metering is essential for fair billing practices and efficient energy management.

    He however recommende urgent need for collaborative efforts between stakeholders in the electricity sector to address key challenges and drive sustainable development.

  • Reps to intervene in electricity tariff increase, says Deputy Speaker Kalu

    Reps to intervene in electricity tariff increase, says Deputy Speaker Kalu

    House of Representatives Deputy Speaker Benjamin Kalu has assured Nigerians that the Green Chamber will intervene in the recent electricity tariff hike by the Federal Government when it resumes from Easter and Sallah break in the next two weeks.

    The Deputy Speaker also said the House would allow Nigerians to drive the process of amending the 1999 Constitution to ensure that the people get a brand new constitution.

    Speaking during a special edition of “Ben Kalu’s Mandate,” a call-in radio programme of FLO FM in Umuahia, the Abia State capital, Kalu said: “It’s a general problem. While I was on my holidays, one of the things I was bothered about was a letter sent to me by the Majority Leader of the House on the need for us to intervene in a matter involving the University of Ibadan Teaching Hospital (the University College Hospital, UCH) power supply.

    “They were disconnected because of this hike and they don’t have the money to pay. We said it’s an essential service. Something should be done about it while we look at other details.

    “I can assure you that when we resume, it’s one of the things we are going to look into. We will look at both sides of the coin to know a win-win approach to it because we cannot also suffocate the investors and cannot allow Nigerians to suffer unduly. So, it is one of the things we will look at by the time we resume and we will find a way to solving it.”

    Commenting on the possibility of Nigerians getting a brand new constitution, leveraging the ongoing review of the 1999 Constitution (as amended), Kalu urged the people to lead the debate and provide a practicable template for the National Assembly to consider the merits and demerits of the required amendments.

    Read Also: Many Nigerians still enjoying electricity subsidy, TMSG hits critics

    “Yes, some school of thought has expressed the view that they want a new constitution: drop the old one and pick up something new. Some elders, known as The Patriots, are also asking for a brand new constitution. But as you know, we are the people’s parliament. You are our bosses,” he said.

    “Whatever the people decide for us to do when we have our public hearings and all these engagements, when we move around because we are going to every geopolitical zones to engage the people…

    “If the people have a consensus that this is what Nigerians want and the template of what they are asking for; how the new one would look like and whatever you have in mind, we will be able to factor that in.

    “I am happy that you are conscious of the move for the amendment of the constitution. I like it when people call to discuss that. It shows there is awareness, which is very key. It’s only when you are aware that you can engage and make the right impact. So, I appreciate you. This is the time to lend your voice to this,” he said.

  • Electricity subsidy removal, a peculiar mess

    Electricity subsidy removal, a peculiar mess

    SIR: Every government all over the world subsidizes certain things for the citizenry. From America to Europe, it is either agricultural products or housing and to all other basic things of life. Therefore, this administration must not make the mistake of thinking every subsidy is an aberration. It is certainly not. There is nothing abnormal in the government still subsidising electricity since it has removed the subsidy on petroleum products.

    Just a while ago, Yemi Cardoso, the Central Bank of Nigeria governor claimed publicly that he had to get a consulting firm, Delloittee and Co, to help the bank verify the backlog claims on forex demands pending before the bank. Probably, this is what the minister of power ought to have done if there are seemingly, fraud related issues concerning the electricity subsidy rather than its total removal. It is not only ill-timed; it is insensitive too considering that the service is nearly non-existent.

    Almost everyone generates their own electricity in their own way. The success of alternate energy businesses in Nigeria lately, especially solar, is a confirmation of this.

    The most vital component of overcoming our energy challenges has never been given the needed attention it surely deserves. What is required is what lawyers will call a fiduciary relationship –coming out to Nigerians clean, transparently, with all the challenges in the generation, transmission, and distribution sector. What is needed is a total forensic audit of capacities and challenges, and of course, the attendant solution.

    The recent decision of granting the states the right to generate, transmit, and distribute its own energy is commendable but may still take some good time to achieve. Successive past administrations at the federal level all share in the blame for the present position of our energy supply in the country. The worst was the administration that unbundled the energy sector and sold off its assets to companies that had no experience whatsoever in power generation, transmission, and distribution. They were only interested in the choice assets of the companies they bought. This is why they have not added any value to the companies in terms of service delivery except declaring a profitable balance sheet predicated on fraudulent billings.

    Since 1999, the ‘song’ has been “government has no business doing business,” and immediately a government business doing well is sold off to a private investor, the business dies afterwards. So it has been with almost all the federal government business ventures sold off to private investors. We deserve to know the exact figure of megawatts generated by our generation companies, how much exactly we need, what exactly are the challenges in the transmission sector, as we all know the challenges bedevilling the distribution sector.

    Read Also: Many Nigerians still enjoying electricity subsidy, TMSG hits critics

    The distribution sector is the most exploitative in the chain by asking consumers to buy transformers and cables etc. With current efforts at stabilising the naira after floating it paying off, and the expected downstream deregulation of the petroleum products sector, that has necessitated the prediction of a downward review by mid-year of goods and services, this removal of electricity subsidy will truncate all these expectations. The consumers on the power distribution line of Band A, the supposed targets of the removal, are mostly goods and services companies, so it is only logical that an increase in production costs will be recouped from the retail costs of goods and services. This is a simple principle of economics.

    Therefore the already battered common citizens will be the ultimate targets of the removal. And suffice to ask what exactly does the government wants to subsidize for the citizens? There is no existent subsidy on agriculture products, none now on petroleum products any longer, none on housing, none on transportation, and so on.

    The ministry of power has to rethink this decision. They should do more of constant monitoring and evaluation of the energy value chain, especially with generation and distribution in order to provide the needed services to consumers and then after a while of sector stability, it can begin to toy with the idea of electricity subsidy removal. In which case the service delivery would have improved and the citizens can appreciate the improvements.

    Nigerians want to see the minister more on the electricity provision facilities visiting for inspection, doing on the spot assessments, and speaking to Nigerians on the efforts being made to increase our megawatts from its present figure to its required figures.

    • Fola Aiyegbusi, “hefzibar2006@yahoo.com”
  • Many Nigerians still enjoying electricity subsidy, TMSG hits critics

    Many Nigerians still enjoying electricity subsidy, TMSG hits critics

    The Tinubu Media Support Group (TMSG) has described the public outrage over the removal of electricity subsidies for 15 per cent of consumers as unnecessary, insisting many Nigerians will continue to benefit from the subsidy.

    The Pro-Tinubu support group also faulted the attempt to muddle government policy by claiming that the price increase for electricity consumers in the Band A category affects all consumers.

    Chairman Jesutega Onokpasa in a statement in Abuja on Monday said President Bola Ahmed Tinubu deserves credit for signing off on an action that shielded 85 per cent of electricity consumers from tariff hikes while also paving the way for improved power supply in the medium and long term.

    “We have seen how some individuals and groups have been jostling for media space to dish out misinformation on the recent tariff adjustment announced by the National Electricity Regulatory Commission (NERC) and felt the need to join the fray to debunk the lies.

    “So much has been said about the price increase from N66 kilowatt per KW/h to N225 for consumers in Band A who enjoy 20+ hours of electricity supply daily but surprisingly it’s being made to look like a general hike in tariff.

    “While it is true that the last tariff hike in Nigeria was in 2020, the distribution companies DisCos have been angling for what they described as cost-reflective tariff to help businesses recover costs and boost investment but it is to the credit of President Tinubu that what we have is a price adjustment that affects only consumers enjoying about 40 per cent of distributed power.

    Read Also: NUEE threatens showdown over electricity tariff hike

    “In addition, out of 800 feeders on Band A, 300 were removed. These are mostly those meant for residences. So, in effect, ordinary electricity consumers will experience no increase outside of consumers in Band B, C, D, and E. Also, those that will experience an increase will receive benefits of lower rates than the alternative power sources they were using,” the group said.

    Faulting the argument that the new tariff for premium electricity consumers would affect productivity in the case of manufacturers, the group maintained: “In our view, the essence of the tariff adjustment is to provide that category of consumers more power, reduce their dependence on diesel-powered generators, and reduce their cost of production. This is one way to grow the economy.

    “So we are convinced that those claiming that manufacturers will pass on the extra cost to the consumer are being mischievous. What they are getting is a reduction in the cost of production, so the consumer should even be expecting lower prices instead.

    “We see it as a win-win for manufacturers and citizens. You can not make an omelette without breaking eggs, so providing a steady power supply is key to the improved production capacity of industries. Improved productive capacity is beneficial to the citizens. So, it benefits all.

    “We make bold to say that not one major manufacturer or big industry player, including their umbrella body, the Manufacturers Association of Nigeria (MAN) have complained over the matter. They know that for them, it will amount to a reduction in the cost of production,” TMSG explained.

    The pro-Tinubu group also took a swipe at some opposition elements seeking to make political capital out of a straightforward action

    “We are not surprised to see the opposition cashing in on the hysteria that an increase in tariffs creates without much analysis of the real situation. 

    “The poor and the less privileged are still benefiting from subsidy on electricity and we urge Nigerians to ignore the baseless postulations and evil machinations of those twisting facts on this matter to mislead the public for their selfish political interests.”

    TMSG hailed NERC for sanctioning the Abuja Electricity Distribution Company AEDC and urged it to pay close attention to the DisCos to ensure that they keep to their side of the bargain and not shortchange Nigerians.

  • Matters arising from new electricity tarrif in Nigeria

    Matters arising from new electricity tarrif in Nigeria

    • By Tolu Ogunlesi

    Quite sad (but not surprising) that it’s the ‘freezer’ comment that’s totally dominated the headlines from yesterday’s Electricity press briefing. There was a lot more that was said, that’s useful to know, as background and basis for conversation and debate.

    If you want to know what else HM Bayo Adelabu said, I took some notes – the comments below are attributable to him (and to the NERC Vice Chair, who also spoke).

    [The important background to all this is that for now it’s ONLY Band A consumers who are affected by the 3-fold Tariff Increase rolled out this week. There are 5 Tariff Bands in all, A to E. Band A are the ones guaranteed a minimum of 20 hours of supply per day]

    1. Prior to tariff change, the Federal Government was subsidizing 67% of the total cost of generating, transmitting, and distributing electricity in Nigeria.

    Nigerian Electricity Regulatory Commission Vice Chair added: If you isolate Generation, that 67% figure rises considerably. For example, in January 2024, the total power generation invoice issued to DisCos was 240 Billion Naira , but the Discos were asked to pay only 24 Billion of this = 10%, which means 90% of the generation cost was being borne by FGN, as a subsidy.

    2. Total estimated electricity subsidy cost (on FGN) for 2024, without tariff adjustment: ~2.9 Trillion Naira (~240 Billion per month)

    3. Total estimated subsidy cost for 2024, after tariff adjustment: ~1.4 Trillion Naira (~113 Billion per month)

    4. The Tariff increase has also been accompanied by a reduction in the number of Band A “feeders” — i.e. feeders guaranteed to supply a minimum of 20 hours per day — across the country. There were previously over 1,000 Band A feeders; now, only 481 are classified as Band A.

    5. There are about 12 million electricity “customers” in Nigeria (please try and understand this carefully before jumping to make comments. It doesn’t mean 12 million ‘people’, it means 12m ‘meter-able’ consumption points, e.g households, businesses, etc).

    6. Band A accounts for = 15% of the 12 million electricity customers = approx 1.8m. The remaining >10m customers will continue to enjoy government subsidies on electricity consumption.

    (Related to this, I’ve seen data elsewhere that suggests that 70% of the revenues collected in 2023 came from Band A – worth confirming that figure).

    7. Of the 12 million customers, only a little over 5 million are currently metered. Which means a metering gap of over 6 million.

    8. The subsidised pricing regime will continue in the short term, with a “transition plan” to attain full “cost-reflective” pricing over the next 3 years.

    9. The restricting of the Tariff increase to Band A is meant to serve as a “proof of concept”; i.e. kicking off with a Band that has the “capacity and willingness” to pay for 20 to 24 hours of daily supply.

    10. The pricing change will help address some of the liquidity issues in the industry; restore a “line of sight” for recovery of investment, and make it more “bankable”.

    11. There is a huge infrastructure deficit in the power sector; obsolete equipment at all levels (this is where the Minister cited the example of some equipment still carrying ECN branding; ECN has been defunct for more than 50 years now)—and vandalization of everything from gas pipelines to grid towers etc.

    12. If DisCos supply less than 20 hours to Band A consumers, there must be sanctions and consequences. “We will not shy away from our responsibilities…”

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    (On this note, NERC Vice Chair added that under the old Power Sector Reform Act, the powers of NERC to sanction were limited, and fines for DisCos were outdated (he cited fines as low as N10,000 per day). But with the new Act signed by PBAT—see No. 15 below—NERC now has expanded regulatory and sanctions powers. Vice Chair cited example of 2018 when NERC suspended IBEDC Board, and Board went to Court and got the suspension set aside, vs 2024 when NERC was able to successfully dissolve the Board of KEDC).

    13. The new Tariff Regime for Band A means there’s now an incentive for DisCos to work to migrate other Bands to Band A, so that they can supply them Band A threshold, and charge Band A tariffs.

    14. Energy consumption management by consumers has to become a priority. This is where the ‘freezer’ example (that has gone viral) was cited. Yeah, def not the best example to use, as we’ve seen from the distracting fallout, but the larger point about more responsible usage stands.

    15. Minister mentioned ongoing efforts to improve electricity supply:

    —The new Electricity Act signed by PBAT (which repealed the Electric Power Sector Reform Act of 2005) has now fully decentralised the sector, and empowers subnational governments for regulation and licensing.

    —Renewable energy investments, led by REA

    —New power plants like recently-completed Zungeru Hydropower (700MW)

    —Investments in new lines, new injection substations, new transformers

    —Closing the metering gap.

    —Communications and advocacy

    16. “The journey of a thousand miles stand with a single step, in the right direction. This one is in the right direction.” — Bayo Adelabu

    -Ogunlesi is a Policy Communication Expert and former Special Assistant on Digital Communication to President Buhari.

  • Crazy electricity tariffs

    Crazy electricity tariffs

    Last week, the National Electricity Regulatory Commission (NERC) approved a 240 percent increase in electricity tariffs for electricity distribution companies, otherwise known as DISCOs, to charge their elite or Band ‘A’ consumers. Instead of the previous tariff of N66 per kilowatt hour, the elite consumers, presumed to be incapable of resisting the punishment, will now pay N225KW/h for receiving up to 20 hours of electricity supply per day. The objective is to reduce this year’s electricity subsidy by about N1.14trn and enable DISCOs to pay for gas and maintain their machines.

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    There is of course something to be said for discriminatory pricing, like fair tax payments. But to do it in such a way as to punish the poor for unavailable electricity supply and also punish the rich for the inefficiencies of the DISCOs is truly galling. So, rather than move in the direction of general 24 hours per day supply, NERC’s message is that both the poor and the rich should be punished for the inability of the transmission and distribution companies to stabilise power supply. In short, NERC has focused inelegantly and narrow-mindedly on the theory of pricing without a corresponding consideration of the implications of such price increases on the economy at a time of stagnating wages, high inflation, low production outputs, and general frustrations. The timing is wrong, and the policy irrational. Could they not rather stabilise power supply and find the right time to proportionally raise tariffs across the various segment of electricity consumers?