Three years after the nation’s power sector was privatised, millions of Nigerian households are still groaning under the weight of ‘crazy’ bills and poor power supply from the distribution firms, ‘FEMI ASU writes
With his fury so palpable, Chief Ade-Owas Owabunmuwa, in a no-holds-barred interview on December 29 in front of his office, echoed the sense of disappointment and frustration millions of electricity customers in the country have.
“When we heard that the government wanted to privatise the power sector, we were leaping for joy – thinking that at least it will be the saving grace. But considering the past and present experiences, the privatisation is not working,” he said.
According to the 70-something-year-old, who is the president-general of Amuwo-Odofin (New Town) Landlords’/Residents Association, less than five per cent of the residents in the low-cost housing estate, which has over 4,000 flats, has prepaid meters, and majority of them are suffering from “outrageous” estimated billing.
Many electricity consumers in the country have continued to decry the non-provision of prepaid meters by the distribution companies to replace the old, analogue ones, with rising complaints about what is popularly called “crazy” bills.
“They give us outrageous bills without recourse to the meters. Whether the meters are functional or not, they don’t want to know. At the end of the month, they give us estimated bills based on the information from the field officers,” Owabunmuwa said.
He described most of the meters in the estate as “not functional’ and “moribund for over 10 years,” saying, “We had written to Ikeja Electric in the past and complained bitterly to them to change the old ones, but they are not forthcoming.
“For over three years, we have been clamouring for the release of prepaid meters to the residents of this estate because that is the only way out.”
The Nigerian Electricity Regulatory Commission, while evaluating the performance of the Discos on the Credited Advance Payment for Metering Initiative recently, said the firms had performed poorly in terms of metering their customers as only 403,255 customers were metered as of March 2016.
According to NERC, data submitted by the Discos indicated that there were about 6.2 million customer accounts as of December 2015, while about 3.21 million electricity users were metered.
Based on the proposals submitted by the core investors in the Discos during the privatisation of the power firms in November 2013, 6.52 million new meters will be installed over the course of five years.
“There are a lot of complaints about crazy bills. Majority of the consumers still get estimated bills, which shouldn’t be the case by now. Some of the Discos are rolling out few meters. They are just too few when you look at the magnitude of the problem on ground,” the President, Nigerian Electricity Consumers Advocacy, Tomi Akingbogun, said.
He added, “Especially now that power supply has gone down, one expected that bills will go down. Because if we are generating only 3,000 megawatts, instead of 5,000MW, one would have thought that the bills will be about 50 per cent of what it used to be. But that is not the case.”
For most of the year, power generation in the country has been hovering between 2,000MW and 3,000MW due largely to the recent upsurge in militant attacks on oil and gas facilities in the Niger Delta, the source of fuel for about 70 per cent of the nation’s power plants.
On February 2, the nation had achieved its peak generation of 5,074.70 MW. But the attendant improvement in supply was short-lived as generation dropped below the 4,000MW mark later that month. It plunged to a low of 1,400MW on May 17, according to the Transmission Company of Nigeria.
Generation stood at 3.735.10MW as of 6am on December 29, according to data from the System Operator.
Several protests, bitter experiences
Over the past three years, consumers across the country have protested against the over-estimated bills from the power firms.
Owabunmuwa said the residents in the estate had embarked on series of protests after a raft of complaints by individual consumers that were not addressed.
He said, “We have had some bitter experiences in the past with Ikeja Electric. We had embarked on protest outings on a number of occasions to their head office at Alausa. They had given us some rosy promises. But none of the promises have been fulfilled.”
“During one of our protest outings, they gave us the assurance that they had prepaid meters in stock in quantum and that within the next one or two months, they will start giving us in batches. Up till now, not more than 10 prepaid meters are in the estate.”
He added, “All they do now with this delay tactic is that they keep on giving us estimated bills, with some people owing as much as N300,000 to N400,000, when they are not running factories in their mini flats.”
Asked why they stopped protesting, he said, “If we embarked on protests on more than 10 occasions, it cost us money. We contributed money to do this and majority of the people here are retirees, and some are no longer entitled to any pension.
“So, when we contributed money to embark on protest on 10 different occasions, and no results. For me to now say they should come around to pay money again to go to Alausa, they will say, ‘The ones we did in the past, what came out?’ No result. That is the situation.”
In October, some residents of Alaba-Oro, Abulekere, Olaniyonu, Alafia and Mosafejo-Amukoko communities, in Ifelodun Local Council Development Area, mobilised themselves and headed to the head office of Eko Electricity Distribution Company to register their grievances over the estimated bills they were getting.
Most of the residents in the communities live in what is popularly called as face-me-and-face-you, usually a bungalow with several rooms facing one another with a household occupying one or two rooms.
The leader, Landlords/Tenants’ Association, of the communities, Mr. Sulaimon Omololu, said, “What we pay for electricity now is equivalent or even more than house rent. So, we are saying that they should stop the estimation and let there be a confirmation as to when they are going to give us prepaid meters.”
Omololu said the rent for a room in the communities is around N3,000 per month, adding that an electricity bill of N25,000 per month given to a five-roomed bungalow translates to N5,000 for each household.
Copies of bills from EKEDC made available to our correspondent showed that a five-roomed bungalow, with Account No 03/77/18/0919-01, Name: Afolayan Lasisi Agboo, Service Address: 60, Agbamu Str, Badia, Lagos, was charged N26,304 in August, up from N14,2208 in July.
He said, “In these five communities, we have between 75 per cent and 85 per cent that are affected because very few meters are still reading. Most of these meters were supplied 35-40 years ago.”
“Because we have uniform problem, we approached the power firm in August; there was no changes. We went in September, the bills were still high. In October when they were higher, we mobilised ourselves and returned the bills to them. So, they isolated all the transformers, about 40, in my area for 16 days.
“By November, when they brought their bills, it was even higher despite the 16 days of blackout. They later said we should go and compile the list of places that were isolated and that the bills will be adjusted. But we have not seen the adjustment.”
According to Omololu, the communities reached a tentative arrangement with the power firm because of the Christmas and New Year period.
“They said we should encourage our people to go and pay little amounts so as to enjoy light. This time they are now saying we must pay the current charge fully and pay part of the outstanding. Then after the Yuletide, we can resume negotiation. Most of us have paid part of our bills and light has been restored. But we are still crying against that excessive billing.”
Another customer of Ikeja Electric, Mr. Bayo Akinlade, a lawyer, is ready to take the company to court for “excessive estimated billing”.
He said he and residents of his estate, Millenium Housing Estate, Oke-Eletu, Ijede Ikorodu, had written to the company and NERC, but the issue had not been addressed.
“Estimated billing is exploitation”
Owabunmuwa believes that the field officers of the power firms are interested in extorting money from consumers, saying, “They know for sure that if they give us meters massively, the possibility of extorting money from innocent residents, asking them for reconnection fee, will not be there. That is one of the reasons why they don’t want to give prepaid meters.”
In a similar vein, Omololu said, “If I am disconnected this month for non-payment, the next month’s bill will come and it will not reflect that I have not been using light for a whole month. If the disconnection last for four months, the bills will still be coming.
“Then they will ask you why you didn’t write them a letter to inform them. Are their officers not supposed to report in the office that the house had been disconnected? Because power is very essential, that is why they are exploiting us.”
Omololu said they had to do the agitation collectively because the area is largely populated by semi-literate and illiterate people, adding, “Because they know illiterates abound here, they treat us anyhow. That is why we are fighting. Those of us who are enlightened say no to this exploitation.”
Akingbogun believes that the power firms are making more money from estimated billing.
He said, “As a business person you want to maximise income and government allows you to estimate the cost of what you are selling and collect money from everybody, which is not done in any sensible society. It is not a transparent system.
“NERC is supposed to put its feet down and stop this estimated billing. Once it is stopped, the power firms will be forced to supply meters to everybody when they start losing revenues.”
The Director-General, Lagos Chamber of Commerce and Industry, Mr. Muda Yusuf, who described estimated billing as an unfair business practice, said, “The earlier prepaid meters are provided for every consumer, the better.
He said, “To get the support of consumers in whatever we want to do in the power sector, the consumers need to be assured that there is equity in the billing system.
“I know they said they have their framework for estimated billing. But if you look at it properly, you cannot describe it as fair to the people. Apart from that, even the guys on the field that actually come up with these bills, there are all sorts of arbitrariness that they bring into it.
“To assure equity and fairness, there should be metering. So, whatever accelerated programme that can be put in place to ensure that, it should be done.”
Power firms enjoying monopoly of sort
Following the privatisation of the sector, 11 distribution companies were carved out of the now defunct Power Holding Company of Nigeria, with each having their coverage areas.
Abuja Electricity Distribution Company covers FCT, Niger, Kogi , and Nassarawa, while Benin Electricity Distribution Company covers Edo, Delta, Ondo, and part of Ekiti. Kaduna Electricity Distribution Company services Kaduna,Sokoto, Kebbi and Zamfara while Kano Electricity Distribution Company covers Kano, Jigawa and Katsina.
Eko Electricity Distribution Company and Ikeja Electricity Distribution Company cover Lagos, while Enugu Electricity Distribution Company covers Enugu, Abia, Imo, Anambra and Ebonyi. Ibadan Electricity Distribution Company takes care of Oyo, Ogun, Osun, Kwara and part of Ekiti, while Jos Electricity Distribution Company covers Plateau, Bauchi, Benue and Gombe.
Port Harcourt Electricity Distribution Company takes care of Rivers, Cross River, Bayelsa and Akwa Ibom, while Yola Electricity Distribution Company covers Yola, Adamawa, Borno, Taraba and Yobe.
The LCCI DG noted that the power sector has a lot of monopolistic features by its very nature.
He said, “In any sector, where you have private sector players, particularly sectors that have some monopolistic features, the regulatory institutions must be up and doing. That is the way it works anywhere in the world.
“If you have investors that have the opportunity to exploit or to take advantage of some monopoly situations, where the market is not a proper competitive market, then the regulator has to be up and doing. Otherwise, the consumers will be exploited.”
Yusuf said the regulator should ensure that the right things are done, adding, “The regulator can do a lot better that it is doing now. It needs to step up its game in ensuring that there is fairness on both sides, to the investors and to the consumers.
“There is an inbuilt monopoly situation, and that is why it is very important that once you have such a situation, you need a very strong regulator to ensure the protection of the interest of consumers.”
Omololu, said, “They are abusing the monopoly. We were thinking it will be like the telecommunications sector where you have competition. But now, you have only Eko and Ikeja Discos in Lagos. No competition and so we are at their mercy.
“If somebody is getting N7,000 monthly and suddenly it jumps to N25,000, what is the yardstick used? Because they are not reading the meter, how will they now assume that you have consumed so much?
“I know some people are even telling them to come and disconnect supply to their houses because of the crazy bills. It is too high.”
Series of sanctions over ‘crazy’ bills
Last year, NERC sanctioned Abuja Electricity Distribution Company for overbilling its customers and ordered it to refund the overbilled amount and apologise to the customers for the wrongful estimation.
In an Order Number NERC/139, the commission said, “AEDC shall with immediate effect from the date of this order commence refund through energy credit of all excess charges billed its customers as a direct consequence of the adjustments in estimated methodology in some of the company’s business units.”
The regular recently fined Benin and Port Harcourt electricity distribution companies N6.22m over their failure to comply with the decisions of Forum Office’s rulings in complaints filed by their respective customers.
The Forum Office is made up of five members of the public and handles complaints that are unresolved at the customer complaint unit of electricity distribution companies.
Two of the three customers, Messrs Ikponmwosa Ogiesoba Barry and F. E. Ubuane, according to NERC, had filed complaints before the Benin Forum Office alleging fraudulent estimation of their electricity bills to which the Forum Office ruled in their favour.
In a related development, the Port Harcourt Electricity Distribution Company was sanctioned over its failure to comply with the Port Harcourt Forum Office decision in a complaint filed by one Toba Aremu Olugbemi.
The regulator said the complainant had on May 11, 2016 lodged a complaint to email@example.com firstname.lastname@example.org over non-availability of meter to which there was no response from PHED.
Power firms blame economic, funding and forex challenges
The distribution companies have attributed the slowdown in the deployment of meters to the economic situation, foreign exchange challenges and liquidity issue in the sector.
The Managing Director and Chief Executive Officer, Mr. Oladele Amoda, says the power firm does not just estimate, adding they use estimation methodology to come up with the bills.
“We look at availability of supply on the feeders and the transformers, and we look at other customers with functional meters in that same vicinity and compare.
“And we have another way of looking at it. We have meters on the feeders also. So, we use all these things to arrive at the billing that we give. We cannot be accurate in all cases. But when customers come to complain, we are much ready to attend to their problems.”
Amoda, however, said they don’t want a situation where a whole community will generalise problems, adding, “We want individuals to come and complain about their own peculiar problems.
“Right now, we are not even interested in estimated billing because it doesn’t pay us. We make more money from those that have meters because they willingly pay when we give them bills based on the reading from the meters or those who have prepaid meters.
“We have done the analysis. We are even making losses from estimated billing. We have planned to meter everybody over time. We started but because of economic issues and lack of assistance from banks, we slowed down a little bit. When CAPMI came on stream, it afforded a lot of people opportunity for us to meter them. But we have stopped that now.”
Amoda said the company had recently signed a contract for the supply of 200,000 meters to accelerate its metering programme. “But we are not going to cover everywhere at the same time. We have been metering but it may not be at the speed that you might like.” he added.
Also, reacting to the complaints over lack of prepaid meters, the Head, Corporate Communications, Ikeja Electric, Mr. Felix Ofulue, told our correspondent that it was the common problem almost all the customers across the country were complaining about.
“We have said on several occasions that the deployment of meters is ongoing,” he said, adding that the company had offices in different areas under its network where customers having issues with estimated billing could register their complaints.
The Executive Director, Association of Nigerian Electricity Distributors, an umbrella body of the Discos, Mr. Sunday Oduntan, had in November, said the failure of the Federal Government to fulfil most of the commitments made to the investors had affected the performance of the sector.
He said the government had promised that there would be cost-reflective tariffs from day one as specified under the performance agreement it signed with the investors, adding that the tariffs had yet to reflect the devaluation of the naira and the rise in inflation from the assumed nine per cent to the current 17.9 per cent.
He said, “While it is fair to state that inefficiencies, corruption and limited information associated with the PHCN is still a challenge to privatisation, the bigger challenges are adverse macro-economic changes (devaluation of the Naira and inflation), gas pipeline vandalism, limited gas supply, regulatory uncertainty, lack of respect for contract sanctity and government policy inconsistency.”
No excuse, say customers, stakeholders
Omololu said, “We know everybody cannot get meters at the same time, but let’s know when we will get it. But we don’t have the hope of getting it and you are still giving us high bills when supply is poor.”
The NECAN president said NERC should listen more to the consumers, saying, “The law doesn’t even allow for estimated billing. It says do not connect anybody if there is no meter.
“If it is too tough for them, then they should sell and leave; there are people who will buy.”
He says, “The power firms will just look at a whole area and say we need to generate N1bn in this area and then distribute bills based on that whether some consumers use electricity or not. That is what they are doing and it has killed many businesses and is frustrating Nigerians.
“For three years now, everything has been done to please the power firms and they have failed to invest. Those who have not made the right investment should be sanctioned. They are used to government spoon-feeding them. NERC has spoon-fed them for too long.”
Prior to the privatisation of the sector, there had been a lot of outcry over crazy bills when the utility company was called National Electric Power Authority, before it was later changed to PHCN.
Yusuf said, “The fact that a problem has existed before now is not an excuse for it to continue. The reason why the system was privatised is to bring efficiency into the system. That is the whole essence of privatisation: to bring added value. And the way the whole power sector reform has gone, it is almost giving privatisation a bad name.
“If you compare what we have now and what we had before the power reform, what will you say is the difference? Nothing really to celebrate about it, apart from the fact that it has moved from the public sector to the private sector.
“So, we need to look at the entire value chain so that whatever we need to fix, let’s fix it. Let us do a proper audit of the system; let’s do an audit of the capacities of all the major stakeholders and locate where the gaps are.”
Upon the commencement of the implementation of the tariff hike of over 45 per cent in February, NERC had mandated the Discos to complete metering of unmetered customers within one year, after which there will be no more estimated billing.
“The new tariff, besides eliminating fixed charge, has a robust mechanism to ensure that the distribution companies fully meter their consumers and eliminate ‘crazy’ billing within one year,” the Acting Head and Chief Executive Officer, NERC, Dr Anthony Akah, said.
He told our correspondent in a recent interview, “NERC has directed the Discos to meet up their metering obligations in line with the performance agreements. If they fail to meter consumers in line with those clear agreements that were duly signed, then we will have to sanction them and may have to come out with other regulatory intervention to protect the consumers from undue estimated billing.”