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Power: Tackling DISCOs For Enhanced Performance



The recent declaration by the Minister of Power, Works and Housing, Mr Babatunde Raji Fashola that the nation’s power generation is set to peak at  9,000 megawatts was taken by many Nigerians with a pinch of salt. Against the backdrop of the embarrassing darkness that has become the lot of many Nigerians, it is either the Nigerian Electricity Regulatory Commission (NERC) is not doing its job as outlined in the books or the minister is simply playing to the gallery.

There is no doubt that just before the emergence of Muhammadu Buhari as president in May 2015, Nigerians had witnessed slight improvement in power supply, following the unbundling of the sector that saw the transfer of an inefficient behemoth to investors under a programme that was fraught with controversy. While Nigerians had hoped that the efficiency in the sector would be improved in the shortest possible time, it seems that the unbundling exercise has not assisted in any way.  Energy consumers are now frustrated and continue to wonder why the anticipated strict regulation of the sector by NERC has become more of mirage than a reality. Though the federal government is quick to assure Nigerians that the power sector has gone through a lot of transformation since January 2015, the result has been abysmally uninspiring. The worsening condition of power is further demonstrated by incessant power outages, crazy energy bills served on consumers on a monthly basis and dilapidated transformers, among other critical infrastructure deficit.

One of the objectives for selling the Power Holding Company of Nigeria (PHCN) was to ensure an improved power supply through investment in the distribution network. At present, the Distribution Companies, popularly known as DISCOs, owe the Nigerian Bulk Electricity Trading Company (NBET) the sum of N859 billion for gas supplied to them, just as NBET owes generating companies N328 billion. The debt overhang has become muddy as both parties have engaged in dispute over the claim.

Debunking the claim through their association – the Association of Nigerian Electricity Distributors (ANED), the DISCOs has accused the Federal Government of not being truthful and simply playing to the gallery for political mileages, now that the general elections are approaching.  Against public perception that DISCOs got N213 billion to invest in its distribution networks, the distribution companies insisted  that only the sum of N58.45 billion was made available to them by the Central bank of Nigeria (CBN) since 2015. Nearly four years since it took over the distribution chain, not a few power consumers have expressed consternation over the inability of energy distribution firms to improve power supply.

It is this lack of investment, according to experts in the sector that has led to inability to invest in the purchase of critical equipment to distribute power. It is a fact that many DISCOs in the country are understaffed to manage their areas of distribution coverage. The inability by the energy distribution companies to generate enough funds is tied to absence of required workforce for enhanced revenue generation. Beyond the need to engage fewer hands in order to keep down wage bills, owners of the power distribution firms should realise the need to either engage the required manpower or outsource the aspect of revenue collection in order to improve revenue generation. In the present situation where marketers engaged by DISCOs are turned into electricians to follow up on complaints by consumers is not only cost effective, but also opens a window for corruption.

Opportunities abound in the distribution network to increase revenue generation and harness the available generated energy megawatts for improved power. In a situation where focus is concentrated on ensuring increased generation without paying corresponding attention to distribution companies is simply a waste of time and funds. Generating power without the capacity to distribute has become the bane of the power sector in Nigeria.

Apart from showing a gross lack of financial capacity to inject funds to brighten the prospects of power distribution in Nigeria, the failure of DISCOs to rehabilitate and get relevant equipment to distribute energy has become an albatross to the desired improvement of power supply in the country.

There is the urgent need for NERC to commence the enforcement of contracts of service entered with DISCOs relating to supply of meters, upgrade of the distribution networks and improvement on market efficiency. With the announcement by the federal government that it would review the agreement entered with the distribution firms in December 2019, it is hereby suggested that since government did not grant exclusive rights to DISCOs over distribution areas, NERC should tinker with the idea of splitting network areas, especially those not effectively covered by the distribution firms.



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