The N19 that the Nigerian Electricity Regulatory Commission recommends for electricity distribution companies to shave off the extortionate tariff of helpless customers in Band A markets, who are actually paying for darkness, is “underwhelming.”
And, by the way, the new agency, with the splendid name, Nigerian Independent System Operator of Nigeria Limited, recently created by NERC to assume the marketing and systems operations of the Transmission Company of Nigeria, is an unnecessary bureaucratic clog in the wheel of the electricity sector.
The Minister of Power, Adebayo Adelabu, should pay attention to the more than 100 uncompleted projects of the TCN that he claims to have identified. One is guessing that the completion of those projects should significantly enhance the performance of the national grid.
To quote Actor Yul Bryna in his role as king in the movie, “The King and I,” “It’s a puzzlement,” that the Ministry of Power is focussed almost entirely on Gencos, where it owns 20 per cent, and Discos, where it owns 40 per cent, but neglects the national grid that it owns 100 per cent!
The minister is correct when he says, “Poor financing and inadequate gas supply have been responsible for the energy deficit we have in the country.” But he should add that the government, that fails to expand and upgrade the national grid, is the most guilty.
Also, he wasn’t exactly explicit about the “lot of work (that is) going on to address the (exceedingly debilitating) challenges (of the electricity sector).” As long as the national grid, owned 100 per cent by the government, constricts the supply of electricity, no Genco or Disco will invest in any facility expansion or upgrade.
If it is true, as the Gencos association claimed in 2023, that they can generate 14,000 megawatts of electricity, whereas the national grid has a carrying capacity of 7,000 megawatts–or a mere 3,400 megawatts when compromised– the onus to fund the expansion of the electricity superhighway falls on the government.
What the government appears to prefer to do is to make already impoverished electricity consumers pay more for the same, or lower, services. This attitude is a fallout of the doctrine that the government can always tax citizens even if the fund raised will be used to serve the citizens.
It is strange that a government uses tariff to justify locking citizens out of regular electricity supply in the name of cost recovery, whereas cumulative defective government policies are the cause of the irregular supply of electricity and the poverty of the people.
Band A electricity consumers, promised at least 20 hours of electricity supply per day, do not seem to be getting the service delivery that they are making premium payments for. Yet their tariff was raised, by nearly 350 per cent, from N66 per kilowatt hour to N225 per kilowatt hour.
In some cases, they do not seem to be getting anything better than customers in Band E, or even those outside the Band A to E loop that the NERC conspiracy has consigned poor and oppressed electricity sector customers into.
One wonders why the Ministry of Power or NERC unilaterally assigned individual customers to preferred payment regimes without consulting them. To assume that customers who live in Ikeja should automatically be in Band A premium service is wrong.
Yet, a manufacturing plant that is located in Ijebu Igbo that is not in the Band A market may prefer to be in Band A in order to avoid or reduce idle time and run its work more effectively and efficiently.
The unilateral lumping of customers according to their residential addresses demonstrates that neither the Ministry of Power, nor NERC, nor even the Discos, conducted any survey to determine the willingness and ability of customers to belong to any of the bands.
The minister, NERC and the Discos must urgently review this unilateral policy that did not take judicious notice of the ability of the customers to pay and the extent of their needs for regular electricity supply.
This is even more pertinent when it seems like customers are just making premium payments for the promised quality of service that is not delivered at the end of the day. Customers will be right if they think they are being robbed as they are forcibly assigned to payment categories that do not suit their financial capabilities.
The plan to streamline Discos along state lines and re-sell those that are underperforming and also owing banks and Assets Management Company of Nigeria is welcome. Already, the Nigerian Governor’s Forum has opened a dedicated desk to break the monopoly of Discos.
The states must take advantage of the amendments initiated by former President Muhammadu Buhari to place electricity on the Concurrent List. If individual states cannot go it alone, they should form regional consortiums.
Something that the government should pay attention to is the security of the facilities of the Gencos, TCN and Discos. Otherwise, whatever effort is put into running the electricity sector for effective service delivery will be abortive.
The usually calm and unobtrusive Dr Deji Adeleke recently told a heart-rending story of how vandals stole components of turbines, worth $5m, from his $2bn Genco at Ajebandele in Ondo State. This wicked act, he notes, may delay the take-off of the project that should deliver 1,250 megawatts of electricity per day.
Dr Adedeji is a serious-minded businessman. His capability, and that of others like him, should not be allowed to go to waste through needless and avoidable discouraging acts of miscreants and ne’er-do-wells.
One should however, commend the minister for acknowledging that one of the things responsible for the low performance of the electricity sector is “the inadequate capacity (of the national grid) to evacuate… power even when it is generated (by the Gencos).” The minister should therefore concentrate on righting that wrong.
The tough decisions that the minister promises to take against laggard Discos should extend to the TCN. Everyone agrees with the minister that the poor “implementation and execution have robbed the (electricity sector’s production) process of its laudable objectives.”
Also, everyone agrees with him that “the people who bought the power companies,” neither have “the required expertise to run the utility firms,” nor were they “financially (buoyant) to pay for the power plants.”
In addition to (a preferred option of) integrating electricity generation, transmission and distribution into one company in each market, the government must not inflict pain on Nigerians who have no idea how to escape the dreadful condition that the bumbling electricity sector players have pushed them.
Many Nigerians think the idea of categorising the services they are provided into bands is an admission of failure by all players in the Nigerian electricity supply sector. In fact, they think they are being held down by the government for a big rip-off.
Minister Adelabu, who acts more as a cost-conscious accountant, should be reminded that the poor service delivery of the electricity sector is caused by inappropriate and poor policy implementation.
If Florence Eke, spokesperson for the Ministry of Power, insists that the government cannot subsidise the electricity sector, the government should then allow the private sector to run it exclusively.
At the risk of tautology, if the government cannot afford to expand and upgrade the national grid, it should farm it out to the private sector.
