For almost two years, I have been paying between 5,000 to 10,000 naira monthly to the Power Holding Company of Nigeria (PHCN) as part of the estimated bill I receive. This followed the many upward review of electricity tariff in a bid to reposition the industry for privatization. This estimated crazy billing does not take into account supply and usage as the bills comes when the house is switched off and locked up or even when I’m disconnected by PHCN. There are no defined parameters for billing. Different flats in the house receive different bills and, even one particular meter shared by three different flats sometimes receives lower bill than me. Compare my bill with that of my friend who lives where the entire compound share one meter. My friend with larger family and more appliances receives a shared meagre bill of about 500 to 700 naira monthly. It is a story that is common place. Many like me have been forced to remain silent because of the huge cost of seeking redress in the PHCN corrupt bureaucracy. I have been fleeced severally by these ladder-carrying extortionists offering to help me do re-estimation of my bill.
Following the success of the privatization and liberalization of the telecom sector, the much hyped replication of same in the power sector has generated huge expectation. One can draw many parallels between the power and the telecom sector. Both provides frontline infrastructures germane to the success of any economy, both were government-run national monopolies, both were corruption ridden with pot-bellied staffers feeding fat on the people without an alternative, and as a consequence, both were near comatose.
The parallel ends there. As much as both are part of national economic backbone, the challenges are different. So are/should be the privatization frameworks. Granted both cannot fit into the same templates, it does seem there is little carry-over of the telecom privatization experience. The authorities do not appear to have learnt any lesson. The eventual liberalization that was applied after repeated failures in NITEL sale deal allowed the telecom sector to blossom with little or no contribution from the national carrier- NITEL and even government. One wonders why the same path is not towed in the power sector.
Many experts advocated the total unbundling and liberalization of the sector that includes doing away with the national grid. They argued that the National Grid is an albatross we would be better off without. The National Grid can be designed in such a way that power can be transmitted, on demand, to any distribution company fro and to anywhere in the country to create flexibility and open up some kind of competition. I believe the gird should exist for two reasons, as the case in many countries. The nation-wide grid can help distribution companies (discos) to demand power from any generation company (genco), no matter their location, thereby creating robust competition in the system.
Secondly any genco or any person generating own power, even those with privately-installed solar systems can sell their excess power through the national grid. So the National Grid can be a public quoted company commercially managed as a power clearing house. Liberalization should get to a point that if any company feels it can provide electricity for a local government, for a community or even for an estate, it should be allowed to do so in generation or distribution capacity or both. At this point, I think the government at various levels has done enough and should hands off; the only government involvement should be in the area of regulation, what the National Electricity Regulatory Commission (NERC) is already doing. The present arrangement that encourages continued government involvement raise many questions. How is competition and quality of service ensured? What is the working relationship beween the new owners and government at various levels that are still investing state resources in power?
Expectation reached high heaven when the new owners took charge of the power industry a month ago. Many subscribers groaning under the unfair estimated billing system heaved a sigh of relief. One month after, these expectations are rather becoming a mirage. As consumers confidence continue to wane, there are confusions as to the cause of the worsening electricity supply and service delivery. In some quarters, this has been attributed to sabotage by former PHCN staffers that are not happy over the shoddy handling of their severance benefits and disengagement process. That allegation has been strongly refuted by the spokesman of Ikeja disco. I recently took on one of the former staffer of PHCN, retained temporarily by Ikeja Disco. According to this man on disconnection duty on my street, almost half of his former colleagues have been disengaged, even when their disengagement benefits have not been paid and they are not happy at all. So the issue of sabotage may not be altogether untrue.
One month after, power supply has actually worsened across the country. Respondents on Nairaland, Nigeria online interactive forum, reported the electricity supply is on the decrease and that there is hardly any noticeable activity by the new owners to give any hope that service will improve in the near future. Many of the new owners are saying that consumers are impatient in their expectation and wonders why anyone should expect improved supply when generation has not improved since takeover. Experts believe that even without improved generation, they are many measures that can significantly improve supply, especially in areas of good survey and efficient billing system.
Revelations are emerging that many discos, especially in the Lagos zone, want to retain the existing estimated billing system that is milking consumers dry even when there is hardly any power supplied. They have simply seen that they can make more money with the status quo than they would if prepaid billing system is in place. But are both consumers and producers/suppliers not missing out on important gains?
It may still be too early to appraise and pass buck but having taken over of the power assets one expected most of the new owners, particularly the discos to hit the ground running. The present arbitrary and clumsy system of billing must not be allowed to continue. A reasonable gestation period is allowed for successful takeover and running of a huge and complex infrastructure like power but one expected instant improvement in service delivery in certain areas. There are two critical tasks any company preparing for a takeover of power distribution should be able to carry out within one month of operation. One is the power survey of their area of operation; this should even have been done before takeover. The second is the rollout of a transparent billing system. Their failure to do these has led to worsening power distribution even when there is no shortfall in generation.
A good power survey would allow the service provider information on areas of great need, areas of periodic need, areas of urgent need and even the power usage/need ratio. Industrial clusters are areas of great need, areas hosting key/important infrastructure like hospitals and educational/defense institutions are areas of urgent need. A working class residential areas and areas with a lot of street lightings are areas of periodic needs where power is used more in the night. Usage/need ratio is quite high because of the present billing system. Most users are without the prepaid meters and its clear prepaid users cut out a lot of wastage. Customers on estimated billing use more than their actual need because they are not mindful of wastage. It is common to see light bulbs and appliances running when/where they are not needed.
And this brings us to the issue of proper billing system. If consumers are billed by the prepaid system, they will invest in power-saving appliances, cut out unnecessary usage and by so doing save a lot of power that can be distributed to more users. They won’t feel cheated as they will imbibe better management habit, and will not be billed when they don’t use or not supplied. It’s a win-win situation for everyone. The Discos gain more as they will save a lot on overhead. House-to-house posting of bills and recovery of revenues will be an avoidable cost. Automated prepaid billings reduce staff requirement and cheating by corrupt field workers. Prepaid system will help suppliers determine actual demand. It is clear that the discos will not only save in overhead that can be reinvested, they will reduce wastage by consumers and have more to distribute. These do not include more jobs that will be created down the stream in the sales/distribution of power systems and credit cards. If there are cell phone manufacturing/assembly plants springing up in the telecom sector, growth of local technology in the indigenous power industry should be expected.
With the present set up, the dream of uninterrupted power is still very hazy. A lot is expected from the new owners if their capacity to deliver should not be called to question. They better shape up and turn things around. We demand more than a tacit statement from NERC that the new owners are required to deploy the prepaid meters. The officials of NERC must show that they are not another regulatory agency there to take the “spoils of office” at the expense of helpless consumers.
Abah John Abah- Geologist/sailor, writes from Lagos, Nigeria.