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DisCos reject FG’s free meter plan

by Folarin Kehinde
written by Folarin Kehinde

Power distribution companies have expressed doubt over the directive by the Minister of Power, Adebayo Adelabu, that prepaid meters must be free for all categories of customers.

Operators, who spoke with our correspondent anonymously due to the sensitivity of the matter, said the minister made only a political statement without considering the input of other stakeholders, especially the installers and meter providers.

On Thursday, the Federal Government banned electricity distribution companies and installers from collecting any form of payment for meters, warning that DisCo officials and installers found extorting customers would be prosecuted. Adelabu issued the warning during an on-site inspection of newly imported smart meters at APM Terminals, Apapa, Lagos.

Adelabu said the meters were procured under the World Bank–funded Distribution Sector Recovery Programme and must be installed for consumers free of charge, stressing that any demand for money would be treated as an offence.

He said the meters would be given to all electricity customers, regardless of their band.

“I want to mention that it is unprecedented that these meters are to be installed and distributed to consumers free of charge—free of charge! Nobody should collect money from any consumer. It is an illegality. It is an offence for the officials of distribution companies across Nigeria to request a dime before installation; even the indirect installers cannot ask consumers for a dime. It has to be installed free of charge so that billings and collections will improve for the sector,” Adelabu said.

However, the DisCo operators who spoke with The PUNCH said the meters tagged as free by the Federal Government would still be paid for by the DisCos within a period of 10 years. The operators told our correspondent that the DisCos cannot be the ones paying for installation, wondering why the government wants them to bear the cost of installation.

According to them, meter installers are not DisCo workers, and someone has to bear the cost of installation.

“Those meters you see, someone has to pay for them, and the government expects the DisCos to bear the cost of the so-called free meters. They said the DisCos can pay it over 10 years.

When you ask the DisCos to pay for any capital expenditure, we call it allowable capex. You have to allow it when computing their tariffs; otherwise, it makes their balance sheets toxic,” an official with a distribution company stated.

Another operator said, “We need to know that meter installers are not staff of the DisCos. They are already asking who will pay them if the consumers do not pay. Did the minister consider all those? You said the people should not pay the installers; who should pay them? We, the DisCos, are not the ones installing meters. That role was taken away from the DisCos when Babatunde Fashola was the power minister.

“They said the DisCos have no business with metering. This is the result we are seeing today. Assuming the DisCos are the ones installing meters, you can force them to pay. We will all see the outcome of that pronouncement in the coming days. If the government can pay installers, no problem, but I’m not sure any DisCo will volunteer to pay the installers.”

The officials described Adelabu’s comment as a populist statement from a politician.

“The statement was just a populist statement from a politician. We are not sure if the President sent him that message. He said everything should be free; where is the position of cost recovery? Anything you do in the power sector, you have to first consider who bears the cost. Somebody has to bear the cost to avoid debt piling up.

“The government ought to sit with the Discos and the meter manufacturers to seek advice if the plan is to make sure the people don’t bear any cost, and we will come up with our various contributions. But instead of doing that, the government would go and make unrealistic promises to the public. For instance, the meters are coming in batches, but you have made the masses believe that there are enough meters for everyone. That’s not the reality,” one of the sources stated.

The operators added that the free meter declaration would jeopardise the Meter Asset Providers scheme, which allows the sale of meters to individuals who desire them.

 

“People are now rejecting the Meter Asset Providers scheme because they have heard that meters are free. The minister came up with a very wrong narrative. Has he sat down with stakeholders before going out to say meters are free? How can you say you have enough meters for over five million people? We still have the MAP scheme ongoing, whereby the meter provider sells directly to the customer. MAP is still there because the free meters they are bringing cannot fill the metering gap.

 

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Headlines

Nigeria Generates Less Than 6000 Mega Watts Since Independence – DISCOS

by Folarin Kehinde
written by Folarin Kehinde

Ever since Nigeria attained its independence till date, the country has been plagued with poor power supply as it has not generated up to 6000 megawatts (mw) of electricity.

This statement was made by the the Association of Nigerian Electricity Distributors (ANED) has said.

The Executive Director, Research and Advocacy, ANED, an umbrella body of power distribution companies (Discos), Mr. Sunday Oduntan, disclosed this in Lagos at a one-day workshop for energy reporters and civil society groups.

The workshop centred on the topic: “Building Consumer Awareness and Strengthening the Customer Service Capacity Of Electricity Distribution Companies”, and was organised by ANED in partnership with McArthur Foundation.

Oduntan, who stated that Nigeria would require 200,000mw of power generation to meet the electricity need of its 200 million citizens, added that going by international standards, 1,000mw was needed to serve one million people.

Of Nigeria’s 13,000mw of installed generation capacity, only 3,500mw to 5,000MW was available for transmission to the final consumers.

With 28 generating plants connected to the national power grid, many suffer from recurrent challenges such as maintenance and repair requirements, trips, faults and leakages that make them unavailable for evacuation to the national grid sometimes.

Also, gas supply shortages caused by the inability of generation companies to pay for gas, sub-optimal gas pricing, as well as the vandalisation of gas transportation facilities leading to shutdown of gas plants were among the many impediments to power generation in the country.

“Since 1960, the country has not generated up to 6,000mw of electricity thus creating a huge gap in service delivery in the system.

“There are 28 power generation companies in Nigeria which comprise three hydro powered stations and 25 thermal stations currently operating below capacity and collectively generating an average of about 4,000 megawatts,” Oduntan said.

Expressing dissatisfaction with the performance of the government-controlled and centralised Transmission Company of Nigeria (TCN), which has been notorious for witnessing unending collapse of its grid with attendant nation-wide blackout, the ANED spokesman advised the federal government to hand over TCN to capable private people that can operate and manage it better.

Noting that TCN has contributed to the poor performance of the sector, he warned that failure to privatise the company would keep Nigeria perpetually experiencing power supply disruptions with attendant negative impact on homes and businesses.

Oduntan also criticised TCN for not having Supervisory Control and Data Acquisition (SCADA) since all these years of its operations, arguing that that was the reason it was hard for the company to discover faults seamlessly and in real-time from its office without someone physically reporting faults on its networks to it

SCADA is a digitalised system that enables prompt and more efficient monitoring of all activities on the networks and resolves issues detected on time.

He, however, exonerated the Discos for their inability to pay for electricity purchased from the Gencos, blaming that on what he described as energy dumping and, in most cases, inadequate supply to meet customer requirements.

He said the non-implementation of cost-reflective tariff in the power sector was a major impediment to the development of the sector and achieving steady power supply to customers nation-wide.

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Headlines

Just In: NERC Approves Tariff Increase for DisCos

by Folarin Kehinde
written by Folarin Kehinde

The Nigerian Electricity Regulatory Commission (NERC) has given Port Harcourt Electricity Distribution Company (PHEDC); Jos Electricity Distribution Company (JEDC); Kano Electricity Distribution Company (KEDC); Kaduna Electricity Distribution Company (KEDC); Jos Electricity Distribution Company (JEDC); Ikeja Electricity Distribution Company (IKEDC) and Ibadan Electricity Distribution Company (IBEDC) approval to increase their tariff rates.

The new approval took effect from January 1, 2022 but the new rate is from February 2022.

According to the document titled: “This regulatory instrument shall be cited as Multi-Year Tariff Order (MYTO-2022) for Port Harcourt Electricity Distribution Company Plc (PHED”), NERC based the increase on the Performance Improvement Plans of the DisCos and indices such as gas price, inflation, exchange rate, US inflation rate and available generation capacity.

The commission noted that the indices with potential impact of on electricity rates were considered.

It added that these indices shall be reviewed in every six months to update the tariffs with changes in the indices as applicable in line with the MYTO.

This was contained in the commission’s Order No: NERC/304/2021, which chairman, Sanusi Garba and Vice Chairman Musiliu Oseni signed on 29th December, 2021.

The document explained: “Consequently, following the approval of PHED’s PIP on 30th April, 2021, the Commission issued the MYTO-2021 Extraordinary Tariff Order effective from 1st July 2021 in consideration on PHED’s CAPEX proposals over a 5-year plan in line with the approved PIP.

“Accordingly, this MYTO-2022 order restates PHED’s approved 5-year CAPEX and relevant assumptions applied to forecast revenue requirements and applicable tariffs for the period 2021-2026 in line with MYTO Methodology and Regulations Procedure for Electricity Tariff Reviews in the Nigerian Electricity Supply Industry (NESI).”

It is programmed from 1st July 2021 to 30th June, 2026.

The document showed that for the PHED (A-Non MD) customers who paid N56.16/kwh in January 2022 will now (February to December 2022) pay N60.67/kwh).

(B Non-MD) customers who paid N56.64/kwh in January 2022, will now pay N59.64/kwh.

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GeneralGeneral

Meet Mr. Fadeyibi “The Hitman from Transcorp Power Ltd” Doing the ruthless bidding of UBA Bank in AEDC

by Leading Reporters
written by Leading Reporters

Electricity consumers from the Federal Capital Territory; Nasarawa, Niger, and Kogi States are in for rough times owing to a ruthless revenue drive being spearheaded by Mr. Adeoye Fadeyibi, on behalf of United Bank for Africa, UBA.

UBA is a major creditor to AEDC.  Technically, UBA owns the Abuja Electricity Distribution Company  AEDC as it stands now. This followed several loan defaults by the electricity distribution company via its UBA Account No. 1019269503. 

An insider source said that Tony Elumelu routed for Fadeyibi after the later set up structures in Eko Electricity Distribution Company EKDC that saw revenue skyrocketing and operational costs and losses down.  Fadeyi’s feat in Elumelu’s Transcorp Power Ltd, Ugbelli where he ramped up power generation of the company from its abysmal 164MW to 634MW within interval of 25 months  was too glaring to be overlooked and needs to be replicated in AEDC, by Tony Elumelu’s estimates.

Other accounts the company maintains with UBA include AEDC Impress Funding  Account No. 22174094498.  This account has become a conduit through which billions of Naira were fleeced under the subheading – Operational impress.  For instance, between October and December, 2018, a total of N1,579,015,000 was mopped into the account as imprest. UBA Account No 10176666012 is believed to be another suspicious account with which the erstwhile management of AEDC carried out their acts.

Other AEDC accounts with UBA  include account no. 1019034680.  This account, according to investigation was used to sweep funds which were later diverted to yet another UBA account No 1017547366.

Another interesting activity uncovered is a UBA Account No.1017681365, allotted to AEDC WAMBA, Nasarawa State.  The account is shrouded in secrecy and may have been used as a veritable conduit for diversion of funds.  AEDC Okene Area Office with UBA account numbers 1021027984 and 1017805387 are two of the many accounts of AEDC that were structured to be leveraged to soothe the stealing appetite of the erstwhile management of AEDC.  

According to a discreet source, the former management played a conscious, pre-meditated  role that paved way for UBA acquisition of AEDC. 

Kabba AEDC Account No 1017805387 was another porous and specially structured account allegedly used in fleecing the Federal Government.

Mr. Fadeyibi prior to being drafted to AEDC by Tony Elumelu-led UBA worked as the Managing Director and Chief Executive Officer of Transcorp Power Limited, Ugbelli.  The company is owned by Tony Elumelu.  Mr Fadeyibi career path has as well cut across  Eko Electricity Distribution Company where he was the MD/CEC as well as General Electricity.

A discreet source who spoke to LeadingReporters on condition of anonymity said that Mr Fadeyibi is on a mission.  A ruthless mission to bend all known rules in the bank’s bid to recover all the monies and loans AEDC owns UBA.

“His mission from his paymaster is clear – Bend all rules, squeeze all sources and get us all the money.  Unfortunately, the consumers are the ones to be squeezed in a sector where regulators are in the pockets of the players.  It is a pathetic situation”.

The electricity consumers with the capital territory and its neighboring states are in for a hard and sad time as the move by UBA would see them paying for more and getting less in terms of quality service. 

“Money, revenue, more revenue and more profits are now the drive force in AEDC”

“The former guys were hired to play the role they played that paved way for UBA to take over AEDC.  AEDC is one of the electricity distribution companies that has proved to be viable.  UBA management has been eyeing the company and incessant loan was the best way to dive in”.

UBA continued to avail its loan spree to AEDC, targeting that a time would come when AEDC would not be able to meet its financial obligation to the bank, thereby paving way for outright ownership.

“Tony Elumelu understands the viability of AEDC, being someone whose company Transcorp Power Limited is a player in the power sector”.  The source said.

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BusinessHeadlines

FGN N50b monthly electricity susbsidy not True

by Leading Reporters
written by Leading Reporters

Organised Labour has tackled the Federal Government over claims of subsidising electricity supply across the country for over N50billion monthly.

The administration of President Goodluck Jonathan privatized the electricity sector in November 2013 and handed it over to 11 distribution companies and six generating companies.

Last month, Minister of Power Sale Mamman, said the Federal Government was paying N50 billion monthly to subsidise electricity across.

But Labour yesterday wondered why the government would pay subsidy for a sector it claimed to have privatized.

Deputy President, Nigeria Labour Congress (NLC), Joe Ajaero, asked the government to come out and tell Nigerians the level of money they were giving to the operators of the sector.

Ajaero, who doubles as the General Secretary of the National Union of Electricity Employees (NUEE), asked the government to unmask the real owners of the Distribution and Generating Companies the sector was sold to in 2013.

He spoke at a briefing to unveil the burial arrangements for the late Secretary General of the Medical and Health Workers Union (MHWUN), Dr Silas Adamu.

The MHWUN scribe and his wife and daughter died in a road accident along Abuja-Kaduna.

Ajaero said: “I have never believed that there is subsidy. Let us take the electricity for instance. When it was under NEPA, the tariff was down there; nobody gave NEPA one kobo. And NEPA was running the lowest tariff. It was not subsidised.

“Now you sold it to people and they increased tariff five times and you still tell me you are subsidising it. I think there is something wrong there. And throughout the meeting we told them there is no subsidy.”

“How do you subsidise a commodity that is the private sector? Are they subsiding garri, banana and plantain that are in private houses? Having privatise the sector unless the so called operators are blackmailing them (Fed Govt) and collecting money free from them (government).

“If a product is sold for N10 per kilowatt hour you then privatise and started selling it at N30 per kilowatt hour, with additional N20 and then you say you are subsidising it doesn’t add up. I don’t know where that money is coming from. It is not true.

“They (government) should come out and tell Nigerians the level of money they are giving to the operators. Nigerians should be able to unfold the real owners of the Discos.

“The names we are hearing none of them own the Discos whether the MD or Chairman or both and we need to know. We have said this again and again and people are saying subsidy. Then you say you have subsidised with about N1.3 trillion and you sold it at N400 billion and we don’t ask questions?

“Why will subsidy be more than the price?”

The labour leader also said governance structure in the country has collapsed.

“Why will subsidy be more than the price?”

The labour leader also said governance structure in the country has collapsed.

Ajaero said: “Governance to a very large extent seems to have collapsed because when we talk of there is no electricity it will seem as if the roads are working or the rail system is working or the roads are working.

“The same way there is no electricity there is no water. You can’t even go through the public water system and open the taps. Growing up, I can still draw an inference from the 70s. That is why I said Nigeria is under developing; the country is going down.

“Things are getting bad and the problem we have is that of governance and if we fix governance things will start working again.”

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