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We can’t stop power failure in two years — Discos

By BusinessNews Staff on August 10, 2015

Despite the recent increase in power generation, the country may still be far from experiencing power failures as electricity distribution companies have said the rot in the sector cannot be cleared in two years.

Nigeria’s power generation hit an all-time high of over 4,600 megawatts in July. But many consumers are complaining that the power sector has not improved substantially despite being run by private investors since November 2013 when it was privatised.

While consumers complain, power distribution companies under the umbrella of the Association of Nigerian Electricity Distributors are lamenting that the rot in the sector is beyond what they had imagined.

The pioneer Director, Research and Advocacy, ANED, Mr. Sunday Oduntan, stated that so much funds had been pumped into the distribution firms in a bid to improving the service without any appreciation.

He said the group spent billions in acquiring the power assets, and was far from breaking even.

Speaking with some journalists in Abuja, the ANED advocacy director said, “The decay in the sector spans 50 years. So, it cannot be cleaned up in a year or two. It is an ongoing investment programme to us the Discos.”

Oduntan stressed that a lot of improvement had been done by the Discos in the power firms that consumers could not see.

He said, “For instance, we spend much to improve the Information and Communication Technology within the companies so as to enhance the billing system. What we inherited from the PHCN (Power Holding Company of Nigeria) was a very ugly billing method that was completed and it created occasions for duplication of bills.

“Some bills were drawn fictitiously in connivance with some workers, who go to the computer room to create new billing address, leaving the old ones. Many of the old bills kept running but the persons who own them could not be traced. So, we invested funds to clear these mess and we also invested in equipment like transformers and many other things because of the rot.”

Oduntan, speaking on the magnitude of decay in the sector and why it would take more time to fix the system, said that the inadequate energy given to the Discos had lowered their revenue base.

Another constraint, he said, was the “very uncertain tariff regime. We are working closely with our regulator, the Nigerian Electricity Regulatory Commission, but it should wake up to its role by nurturing the industry. As a regulator, NERC needs to know that this is an infant industry that should not be compared with the banking sector, which has been there for years.”

He said that the Discos were not complaining, but noted that what the firms were agitating for was a cost reflective tariff that would clearly show the cost of delivering electricity to the consumers.

He argued that in the days of the PHCN, there was subsidy; but this was halted by the Federal Government immediately the private investors took over the power firms.

He said, “However, we thank the government for the recent Central Bank of Nigeria’s intervention fund, which is a loan given to us at 10 per cent interest rate for a 10-year period. But we are want them to do more to solve. We also have a lot of losses especially due to non payment of bills. So, many customers are not paying and we are appealing to the Federal Government to prevail on its departments and agencies that owe us huge debts to pay up.

“The Department of State Services and the military formations owe us, as well as other agencies. The MDAs are owing Abuja Disco alone N7bn. If we have that today, don’t you think there will be much investment in the system?”

Oduntan said the association had started computing the list of the amount federal, states and local governments, as well as their ministries and agencies were owing power distribution companies.

He said, “They accuse us of not investing in the networks but they don’t pay their bills. A federal agency in Abuja is owing Abuja Disco N90m. On disconnection, they paid N20m and later they were taken to court. We told them to pay N10m and then sign a monthly payment plan to offset the N70m debt but they refused and so they remain disconnected.

“They reported to NERC and instead of NERC to support the Disco’s efforts of getting the money, shockingly our regulator that should be a neutral arbitrator sent a letter to the Disco that the agency must be reconnected despite the huge debt by the corporation and instructed that it must not remain in darkness.

“I hope the regulator is not telling us now to be condoning debt, while it wants us to invest hugely in the sector. There are many similar examples. For instance, men at the military barracks in Keffi beat up our officers who went there just to collect their bills.”

[Punch]

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