The Thieves Called Electricity Discos – By Dan Amassoma
About 5 years after the much celebrated privatization of Electricity Distribution Companies (Discos) that provide last mile services in the electricity supply value chain., it has been ‘hell’ of some sort for electricity consumers across the country. Electricity consumers optimism that electricity supply would improve; tariff would be a true reflection of the average income of consumers and service delivery would have an improved touch of professionalism has since disappeared. Events have proven the entire privatisation process was never well thought out or designed to improve service to consumers and ensure more power is available for Nigerians at a reasonable and affordable price. Instead, the privatisation has left sour taste in the mouths of Nigerians to the extent that if given the opportunity, Nigerians will rather revert to the days of the ‘inefficient’ NEPA. Those were days when we had more power and paid reasonable amount as power cost. Those were days when the cost of power per household was a lot more a reflection of the average income of Nigerians. Those were days where you had officials coming to your house to read your analogue meters and bill you accordingly. Unfortunately, all that is gone now.
Evidently, the privatisation of electricity Discos is more of a problem than a solution to Nigerians. What you have now is a bunch of poorly trained ill mannered staff deployed as willing tools to extort Nigerians via the menace called estimated billing system. This system is a fraud and also an insult on electricity consumers. It appears our government connived with Discos to further impoverish electricity consumers because it is very difficult to explain the helplessness overtly expressed by the Minister of Power; Mr. Babatunde Fashola over the outcry of Nigerians about the estimated billing systematic scam. How does one explain being billed N35,000 per month for a 3bedroom flat? How much is the minimum wage of an average Nigerian worker? How realistic is this billing system? Yet officials of these Discos force it through the throats of Nigerians to pay these exorbitant amounts; failure to so do often results in disconnection and recently seizing your electricity cables you bought with your money. How pathetic!
How did we get here?
The privatisation of successor Discos was done using the concept of Aggregate Technical, Commercial and Collection (ATC&C) loss reduction. Under this methodology, the investor that proposed the highest ATC&C loss reduction (in absolute percentage terms) over a five-year period was deemed to have won the bid for the shares of the Disco. The ATC&C loss reduction concept was preferred over other sale evaluation methodologies to ensure that core investors addressed the fundamental issues of high losses in the operations of Successor PHCN Discos. Core investors who posted the highest ATC&C loss reduction percentages effectively promised to reduce ATC&C losses by making the necessary capital investments in network improvement and metering infrastructure to address these losses, and in addition, optimise the operations of the Disco, which they bid for. This promise was captured in a Performance Agreement with the BPE. Core Investors who do not achieve the promised ATC&C loss reduction at the end of five years, would effectively lose their investments and will only be entitled to receive a one-dollar compensation from the government.
Where are the necessary capital investments in network improvement and metering infrastructure?
Electricity consumers were promised prepaid meters before the privatisation process was completed, 5years later we are yet to see that promise fulfilled. Discos have refused to keep to their part of the bargain as agreed with the BPE. Perhaps it is more lucrative to continue stealing from Nigerians with the estimated billing system than metering consumers. It is also disheartening to see that these same Discos are not making the necessary capital investment in network improvement neither have they noticeably optimized the operations of Discos to ensure the sector does not collapse. As at now, even if Gencos generate 15,000Mw of electricity, does the TCN have the capacity to transmit same? Again, have the Discos who provide the connection between customers and the electricity grid made the necessary capital investment in network improvement? Your guess is as good as mine.
Would Core Investors lose their investments?
The major drawback to the ATC&C loss reduction methodology is the absence of credible baseline loss data to ascertain the existing loss levels at the point of handover of the Discos. About Five years after the Discos were handed over to Core Investors, there is still no credible baseline data known to the public or credible industry experts establishing loss levels. Without a credible baseline data, it has proven quite difficult to measure the level of ATC&C loss reduction so far achieved by Core Investors since handover in line with the Performance Agreement; consequently, it may never get to the point where core investors would lose their investments because of poor performance because the success or otherwise of core investors ought to be measurable from a Technical and Non Technical loss reduction point of view.
However, from a consumer point of view, Core Investors are thieves, bullies and their operations of Discos are at best a complete rip-off of consumers while the government of the day looks on. How else can one describe a corporate entity that bullishly force consumers to pay for power consumed, power not consumed, power never supplied, technical losses and so on, with the instrumentality of the estimated billing system? Is that not corruption? Or because they are only stealing directly from the pockets of consumers it is not corruption and consumers can continue to suffer for all the government cares? Even the ‘Alpha’ performing former Governor of Lagos State Babatunde Raji Fashola, now Minister of Power, known for his strides in Lagos was caught by the anti Jonathan fever of 2014 and promised 10,000Mw in 6months, 3years after, saddled with responsibility to make it happen have continued to tell stories and give excuses that breaks hearts and put his integrity in doubt.
There is need for the National Assembly to revisit the entire privatisation process that led to this mess. Discos are on record, the only sector that cannot be easily regulated as they have the nerve to take their regulatory agency to court and get injunctions that place them above board for the rip-off to continue. NERC is almost like a toothless dog that can only bark but can’t bite. As a matter of urgency, the NERC should partner with the National Assembly to get more powers to sufficiently regulate Discos before consumers take laws into their hands by violently refusing electricity officials from carrying out their legitimate, albeit, extortionist duties.
66 total views, no views today