9 YEARS OF POWER SECTOR PRIVATISATION IN PERSPECTIVE:DISCOS ARE NOT TO BLAME; NERC IS THE MESS By Adeola Samuel

9 YEARS OF POWER SECTOR PRIVATISATION IN PERSPECTIVE:DISCOS ARE NOT TO BLAME; NERC IS THE MESS By Adeola Samuel

by PEOPLE'S VOICE
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The privatization of power sector in November 2013 was considered a good move and was expected to be the harbinger towards emancipation of an uninterrupted power supply with high hope and expectation from the teaming masses and industries alike for a better service delivery and value for money.

The reverse seems the case with the contraption I dubbed monopolistic privatization with brazen shrewd business practice by the operators not witnessed pre privatization.

In 2019, when my electricity advocacy group, All Electricity Consumers Protection Forum organized her yearly power sector summit with major stake holders present including two commissioners from Nigerian Electricity Regulatory Commission,

Consumers Affairs commissioner, Finance commissioner and representative of then minister of power Engr. Mamman.

The topic of my address was likening to the title I gave this article. The address was dubbed, Regulatory body as a catalyst for service providers impunity.

In that address, I highlighted major reasons we keep organizing this type of program year in and out and all that propped up are complaints from consumers over the screwed ways of business practice by the discos in their franchised areas. From Lagos to Ibadan to Port-Harcourt and Benin city.

 

The complains mainly and majorly on estimated billings with provision of line materials and packing of sand by consumers and high hardness in the area of supply not correspondent to expected bill charged among others.

 

Prior to the time, Prof Yemi Oke, an associate Professor of law (as he then was) University of Lagos, law faculty made a lurid statement in an interview which I quote, thus and probably summed up the mood in coming up with this article before the ten years of the power sector performance agreement. He said “some of these guys mainly the service providers deserve to spend eternity in jail. It’s a shame that NERC has failed or refused to wield the big stick. For some of us, this nonsense outlined are due to kind of regulator we have in NERC. It seems over regulation of the sector by all kinds of needless regulation of the sector that never get implemented or enforced give a false wholly impression of some sort of regulation. But the fact is non existing in practical sense, as long as we can’t feel the impact of a strong regulation regime put it differently.

 

I blame the NERC for all these mess. NERC has supply been very lame and gross inefficient on power sector regardless, otherwise all these things mentioned which we know would have been severally and summarily pushed by a serious firm, forthright and effective regulator”.

 

The quote summed up the tittle of this article in that it succinctly framed my mindset in arriving at it.

 

NERC AS THE MESS.

I ruminate on many occasions to decipher why do we have such mess in the power sector, particularly, in the distribution end of Nigerian Electricity supply industry (NESI) why so much loopholes to the extent that consumers and distribution companies, staffers engaged in fist cuff and exchange in dangerous fight that led to death and maiming each other. Why has all remedies provided to make supply increase from the value chains of industry never bring the desire results?

 

Why are we still where we are in 1999 in supply, distribution and generation despite privatization and attendant money pumping policies for meter and loans yet we still grope between 3,000 and 5,000 megawatts generation to power over 200m Nigerians?

 

REGULATORY BODY AS A CATALYST FOR SERVICE PROVIDERS IMPUNITY

NERC Areas of Mess: Connection disconnection schedule

It took our April 2019 Road show tagged illegal Disconnection is a criminal offence to sensitized the people of their rights on disconnection before few of the discos recourse to it and start given disconnection notice and observed partially the ten days grace offered by Subsection {5}{1)(a) of the above quoted law before disconnection of power can take place, even at that no disconnection notice will be dispatch but disconnection order. The law stipulates that a disconnection notice which will explain the debt, the time expected to pay and due dates disconnection notice was to be served and expired.

 

Section 32 of electric power sector reform act 2005 empowered the regulatory body in this wise Nigerian Electricity regulatory Commission to among other things

  • To maximize access to electricity services, by promoting and facilitating consumer connections in distributions system.
  • To ensure adequate supply of electricity is available to consumers.
  • To ensure that the prices charged by licenses are fair to consumers.
  • To ensure regulation for licenses, consumers, investor and other stake holders.
  • The approach of regulatory commission in the implementation of the above stated monitoring power are meant to be evenly applied if not more tends towards consumers satisfaction and protection but in practice and experience so far, the reverse is the case.
  • Compensate any customers for illegally disconnection while I can’t count how many consumers, they have issued loss of revenue receipt for illegal connection by passing and energy theft.

In all these advantages to the consumers, the regulator looks the other way hence the service provider’s impunity in this practice waxes strong.

 

CAPPING METHOD

Prior to the issuing of order 197/2020 of February 20,2020 there was so much frustration on the side of consumers over humongous monthly bill on estimation given and receiving from discos nationwide. My coordinated group all electricity consumers protection forum embarked on massive advocacy and protests with other consumers association against the. estimated billing regime which characterized in many consumers having ridiculous outstanding debts profile with discos especially in Lagos franchise area. We engaged NERC, and with our 2019 power sector and presence of those mentioned before the message was clear.

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The NERC sent correspondence to us, asking for our input on their intention to capped billing and we made suggestion among others to the extent that it was adopted to arrive at the template that formed the capping order directive to the discos nationwide. According to the order 197/2020, paragraph A of NERC directive order it was stated that “ESTIMATED billing is hereby repealed and to be replaced with capping method.

 

If was obvious from the body language of the discos especially in Lagos franchised areas that as usual such order is a nullity and like before the letter head paper of NERC that contain the order remain servette papers and it’s meant for waste bins. We tasked ourselves as consumers advocacy group to monitored implementation and true to our suspicions, they did not implement it in March, April bills that supposed to show in the consumers consumption charges rather the estimated billing believe to have been repealed took a new dimension with astronomical increase to non-metered consumers.

 

I wrote to NEPC through the consumers affairs commissioner office and pronto a letter was issued in May 2020 to intimate the discos of their intention to sanction them for non-implementation of capping method and in the notice, NERC listed only four discos that have implemented to date.

 

Thees discos that have implemented to date: are, Ibadan Electricity distribution company, Abuja Electricity distribution company, Yobe Electricity distribution company which as at then was under force majeure and another one. To our chagrin not even this notice letter moved the rest to obey and implement hence, the remaining “Obedience” discos joined the bandwagon and as at this time, no sanction was given to them except the new increase in tariff approved last year September to compensate their impunity. it’s this obscurity that make our advocacy group approached the court in Lagos to challenge their proprieties for such disobedience of capping order based on section 63. of EPSRA 2005 (Electric power sector reform Act) which mandated all licenses to obey and carried out directives and order of NERC without exception but due to mess called NERC has become, they rather use nose mask to cover the stench from the mess and moved on.

 

METER ASSET PROVIDER (SCHEDULE 2019)

In a bid to further stem the tide of consumers paying for what they did not used in supply yet got charged by the discos, all electricity consumers protection forum embarked on another sensitisation program through radio and fliers with road show that without prepaid meter to clearly measure the judicious usage of supplies and paid accordingly by the consumers are at receiving end hence if they will failed to meter consumers they should henceforth not pay.

 

This because slogans of many communities with banners at their gate to show compliance. We also engaged NERC and other stakeholders even the discos to intimate them of their neglect and reminded them of the clause signed in their performance agreement in 2013 while privatization ongoing that within 18 months gestation period, all consumers shall be metered which as at then, the metering gaps was 8:3m consumers. All these agitations put together compelled the them NERC lad by professor James Momoh to come up with Meter Assets Provider programme.

 

The scheme primarily was to help procure meters in a seamless manner to the consumers at their cost with fainted idea on how they are to recoup their money. Less I forgot consumer have actually become puns in their mess in that Feb 2016 the then minister of power thus the NEPC lad them in capacity by Anthony Akah after the exist of Dr. Sam Amadi that midwifed the hocus focus monopolistic privatization a scheme to also produced meter was introduced, called CAMPI (credit Assets Meter Provider Initiative. Good as the idea was intended, NERC messed it up.

 

The program was piloted to allowed customers paid for meter (N 64,000) the discos installed and later repaid the consumer thru recharge point till the whole N64,000 got deflated.

 

But, alas, customers in their desperation paid for meter to escape the menace estimated billings, while few were metered but not reimbursed, others paid but till date neither metered nor reimbursed back their money, and guess what, the NERC look the other way and the consumers continues to bear the brunt of the foul odors of the unwholesome practice of the discos.

 

The introduction of MAP just like the capping method was meant to help the discos on one hands who with all the shrewd business practice and under hand dealing with consumers still claimed they don’t generate much hence failure to remit receivable to NBTE, the intermediary between the discos and Gencos for the transmission of generated megawatts; and to relief consumers of her age long whitlow of scrupulous estimated bill because not even with the introduction of customers categorization Into band A,B,C,D and E makes them fair better. Meter assets provider schedule have some provision, majority are,

1) A registered matter asset producing company solely approved by the NERC (mess).

2) Consumers felling KYC (know your customers) form with discos in their franchise area, get ARN (assets registered Number) be inspected for suitability of other the materials and then make payment which was N38,000 for single phase and N 69,000 for three phases.

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3) Within ten days of inspection and payment, consumer must be meter.

As usual, we admonished consumers to move into the scheme at least another fight won and let’s not throw the baby away with bath water with the available of objections and won provision of how their money paid will be recovered since the law is clear on who ought to provide meter and other line materials the cost of which already inputted in the tariff charged.

From my end, I noticed that NERC has created another mess in the provision that says 10 days after payment, Consumers must be metered. What happen if they are not metered after 10 days as stipulated, the schedule or order was silent on it. I raised this with the, then consumers affairs commissioner and he told me that it will be looked into. Also, the issue or repayment, he said “Sam that`s how he addressed usually once we have discussion to engaged in, let the schedule begin, it will surely be addressed” that since, no matter how small the cost is already in the tariff paid by the consumers”. With this assurance form him because I knew him to be man of his words, I encourage those that are seeking my classification to go ahead.

 

Surprisingly as other mess created in the past the NERC live thru to type and never raised a hand to defend the consumers when reports from the field shows that those that have paid, inspected and approved for three months, six months even one year now that are still not metered. All we got from NERC in my engagement with them was that the approved meter provider companies not enough, and they are trying to approves more to help in more provision and metering. My reaction was that of a flabbergasted fool in mixed streets addres,. because I cannot understand why a pilot scheme won’t take into consideration such scenario before whimsically put a provision that 10 days after all process done, a consumer must be metered. This situation persists even with federal government intervention of national Mass Metering scheme, no respite in sight as its common knowledge that while this scheme ongoing, those on MAP were suspended, yet according to the statistics we obtained from NERC in our office at All Electricity Consumer Protection Forum; as at 2021, the total numbers of Meter Asset Provider issued out was 581,000 for 2 years while that of National Meter Asset Scheme was 508,000 for period of six months. Let me leave the discrepancy lacuna to your imagination. It’s obviously obvious the discuss are not to blame truly save the mess called NERC.

 

INCREASE IN TARIFF

The response of NERC and Speed at which they accede to such request and approved such at a lightning speed baffled me until I look deeper and found out that its due to enlighten self-interest of the regulatory body due to sharing formular. Without bothering you much with legal semantics of electric power reform sector act 2005, its imperative for you to be inform a little about process involved in arriving at approval for tariff increase especially major review and see the mess often created by NERC to satisfy their wimps.

 

Section 96 of the Electric Power Sector reform act 2005, empowered the regulatory body to formulate schedule how tariff regime will be guided, while section 76 provided the process to be followed at arriving the approval end.

 

In exercising this power, the NERC came out with a schedule called MYTO which stipulated that at approval end, such increase will be done every 5 years MYTO mean (Multi Year Tariff Order).

 

It will interest you that, the provision in section 76 (1) (a) and 76 (2) (a, b) is unambiguous so also is (7) as provided in Electric power sector reform Act 2005. The Mess was created in 2016, when the NERC led by Anthony Akah in interim power approved increase in tariff to 21.30k for residential and N27. 80k for commercial customers respectively. This move was challenged in Court by our Friend Mr. Yemi Toluwani at Federal High Court, Ikoyi before Justice Idris Mohammed as he then was our advocacy group later joined him and at the end the judgement was in favour of the masses that the increase was criminal, uncharitable, Null and void was set aside. The judgement was never obeyed by NERC, not even the injunction obtained by may 28th 2015 to prevent announcement of the increase on Feb 3rd, 2016 was adhered to. Fast forward to 2020, in the midst of pandemic, the NERC created another mass by announcing increase in tariff with hocus pocus categiorisation of consumers into band A B C D. That categorization was a systematic fraud and re-introduction of estimated billing which was repealed in the capping order 197/2020 paragraph A as stated earlier on.

 

The process of section 76 (1) (a) (2) (a, b) was not followed same to paragraph (7) of that same subsection (2) all the provision was flagrantly ignored by the regulatory body just to see an increase in her sharing formular of generated revenue from discos which is 5% to run the affairs of their secretariat according to the stipulated allocation directive. Section 76 (1) (a) allows the discos to ask for increase based on the investment they have expended in the sector with verifiable evidences and according to performance efficiency witnessed in the sector. To an active regulatory body that provision in paragraph 2 of subsection 1 is enough to knock down the request but not mess called NERC. It must be done because the more money accrued to discos the merrier for them. Section 76 (2)(b) also emphasis performance and improved service delivery before discos request can be entertained.

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It’s also glaring to the blind and audible to the deaf and with common knowledge that a nation groping between 3500 and 5000 megawatts to service over 200m population can’t possibly by indices measured performance but NERC ignored it. Paragraph 7 of same section 76 was about wide consultation with consumers, labour union and other stakeholders, results of which will determine their position couple with adequate metering of consumers but none of this move NERC, the Mess must be created, the consumers keep bearing the stench and they will keep organizing consumers complain resolution forum which will also ends in fiasco and stalemated while roller coaster remain the order of the day at the expense or tax payment funds.

 

NERC mess covers that makes me believe that discos are not to blame as a business going concern, every capitalist is about profits and such profits can come through many means as long as they have willing and compromised regulatory body like NERC who created mess by looking the other way over flagrant disobedience to her order, directive and extant act of business practice in the power sector.

 

HOW CAN WE CLEAR THE MESS?

Scrap NERC and put their functions under FCCPC especially the area that has to do with consumers affairs, tariff and implementation. The ministry of power. In the last interview of Mr. Buhari, I heard the president lamentation and unhappiness over performance in the power sector. I was surprised to hear that from him being the alpha and Omega at helm of affairs in whose table all bulks stopped? What type of brief did he receive from the power minister at the weekly EXCO meetings? The law mandated the NERC to submits report of activities to NASS monthly, what type of feedback do they received. What has president done to it? Only when the time allotted to work almost ended. He was saying who are those who acquired it, are they engineers, they don`t have money bla bla.

 

Who is Mr. President deceiving? It was the caliber of the people that took over the power sector thru that caricature privatization that made him not to act decisively on it They are partly friends and known faces to Mr president so, he should stop crying when the head is off Jare. My reaction to his comment was like seriously Mr. President? Mr. president does not know who are the people in charge but he can request for their papers from CAC.

 

He does know they are not engineer and have no money but he failed to activate review on contract performance agreement as stipulated that after five years they can be done? One of the reasons I said discos are not to blame. Discos knew in the agreement, the provision allows them to ask for grace or one more year before review due to extraordinary variable, and the discos gladly did and was approved for them but even after the expiration of the one year extension, did Mr. President activate their own power to review? The answer is No.

 

Mr. President crocodile shows of regret in power sector performed can be like to a dog who bite his own ear with razor blade (Yoruba will say Ateyin kogbon aja ti abe ge leti, ti owa nfi abe pamo.

 

My Humble Suggestions

1) Scrap NERC they are not useful and their usefulness are at best good at collecting revenue for discos

2) Beginning now the process of reviewing the privatization performance agreement which was put at 10 years. 2013 – 2023

3) Let the national assembly hasten the review on electric power sector reform Act going on, let it be pass with new regulating body to be inserted or put it under FCCPC head by Babatunde Irukeira. He has shown that an once moribund agency can be revived and become actively responsible. And they should not remove the provision that criminalise estimated billing provided there

Resourceful,

Above all in future engagement, let the privatization be done with the mind that we all will enjoy the mess while it last.

Its my humble opinion on power sector activities in the last 9 years and I can say it with boldness I was not wrong with the title DISCOS ARE NOT TO BLAME, NERC IS THE MESS.

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