NINE years after the privatisation of the distribution component of the electricity sector, millions of consumers have yet to own prepaid meters. This subjects them to extortion and exploitation. According to the latest data from the Nigerian Electricity Regulatory Commission,7,744,909 consumers as of the second quarter of 2022were without prepaid meters.This is a slight improvement from the 7,802,427 in Q1 2022. But that shortfall is still huge. The implication is that millions of consumers are being exploited by the distribution companies under the chaotic, fraudulentestimated billing system. The promises by the Federal Government, NERC, and the DisCosto deliver prepaid meters to consumers is taking too long.
The regulator said out of the 12,542,581 registered energy consumers in the country as of March 2022, only 4,740,114 or about 37.79 percent were metered. The remaining 7,802,427 consumers are billed arbitrarily through some wonky arithmetic, resulting in what frustrated customers call ‘crazy bills.’
These represent appalling statistics for a country of 216 million people with enormous resources,one that styles itself as the giant of Africa. The 2013 privatisation of the distribution and generation components was aimed at resolving this basic issue. Previously, an August 2020 programme by the Federal Government in conjunction with the World Bank to inject one million meters into the system at the cost of N60 billion, has had little effect. Currently, exasperatedelectricity consumers are being extorted by the unscrupulous DisCos and their agents. Other consumers ended up buying the meters.
Electricity consumers reportedly lodged 251,007 complaints against the DisCos between April and June 2022to protest estimated billing, lack of meters and service interruption, among others. In a report, the NERC said, “In 2022/Q2, cumulatively, the DisCos received 251,007 complaints from consumers – this is 7,620 (+3.13 percent) more complaints than those received in 2022/Q1.”The commission pointed out that “metering, billing, and service interruption were the prevalent sources of customer complaints, accounting for more than 72 per cent of the total complaints during the quarter.” From the arbitrarily high estimated billing regime, NERC is mouthing the obvious. In comparison, Ofgem, the United Kingdom’s electricity regulator, said it received 3,080 domestic and 703 micro-business complainants who had lodged complaints with their supplier in late 2017.
The unbundling of the behemoth Power Holding Company of Nigeria in November 2013 led to the creation and privatisation of power generation and distribution companies with private investors taking up 60 percent and 40 per cent stakes in the firms respectively.The government is left with the balance. Hope had risen that the extremely poor history of electricity generation and distribution in the country was about to come to an end with the private sector expected to bring about efficiency and cost savings, but Nigerians have largely been disappointed by the performance of the privatised entities, especially by the awful performance of the DisCos. From 6,336.52 megawatts recorded in 2021, generationcrashed to 5,346.82MW in 2022.
As of August 2022, the Federal Government’s intervention fund to the electricity distribution companies since their privatisation had risen to N2.9 trillion from the N2 trillion recorded in May of that year, thus indicating a 45 percent increase over the period.
The Bureau of Public Enterprises said there was an approval of a fresh €2.3 billion loan for the transmission and distribution arms of the sector. Before that, the last credit to the electricity distribution sector was the $500 million loan by the World Bank in May. Similarly, the Federal Government said it spent a total of N1.7 trillion on the sector from 2017 to 2020, bringing the total funding to N2.9 trillion.
In February 2022, the Federal Government stated that it would begin the distribution of electricity meters to four million households to tackle the problems associated with the estimated billing system, adding that the gesture was aimed at ensuring that every customer had the liberty to control their electricity usage. It explained that under its mass metering initiative, over one million households received meters in the first phase of the programme, while over four million households would benefit in the second phase.
However, the 11 DisCos last year insisted that payment for meters by end-users was not unusual and would continue. The Association of Nigerian Electricity Distributors, the umbrella body of the utility companies, said that not all approved metering schemes come at no immediate expense to customers.
ANED explained that under NERC’s Meter Asset Provider and National Mass Metering Regulations, there were two metering programmes—National Mass Metering Programme and the Meter Asset Provider. The former is a policy intervention by the Federal Government, with funding from the Central Bank of Nigeria. This programme commenced in 2021 and the objective is to expeditiously close the electricity metering gap and the meters are provided free.The MAP scheme, which was approved in 2018, comes at a cost.
In October 2019, the House of Representatives passed three bills sponsored by the Speaker, Femi Gbajabiamila, one of which sought to criminalise estimated billing of electricity consumers by DisCos by making it mandatory for them to provide prepaid meters to consumers. Sadly, the legislation that would have instilled sanity to the chaos did not see the light of day.
Last March, a Delta State High Court sitting in Ughelli declared as wrongful and illegal the issuance of very high and exorbitant estimated electricity bills to residents of Ughelli town by the Benin Electricity Distribution Company. The judge, Joshua Edun, declared that the BEDC action was contrary to the provisions of the law, adding that by virtue of the provisions of the Electric Power Sector Reform Act, 2005, DisCos were not legally empowered to issue and serve very high, unreasonable, and exorbitant estimated bills on customers.
To meet their needs, most Western economies rely on power privatisation. In the 1990s, the 12 regional electricity boards in England and Wales were privatised. Later, the Scottish industry was sold. The generating outfits, National Power and Powergen and the National Grid, were also privatised, the BBC reported. Most households there now get their electricity and gas from the Big Six energy companies (British Gas, Ovo, E. ON, Scottish Power, npower and EDF).
To its credit, the regime of the President, Major General Muhammadu Buhari (retd.), says it has just licensed 20 local meter manufacturers to ease the meter shortages. This should be followed to the letter.
The in-coming government must take a holistic look at the power sector and resolve the lingering problems there, including the non-provision of prepaid meters and the widespread extortion of consumers.The privatisation of the successor generation and distribution companies should be reviewed as the 10-year moratorium on power sector privatisation will end in October this year. The new administration must encourage more participation at different levels to give the DisCos and GenCos competition.