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How Erratic Power Supply Cripples DisCos’ Revenue Generation

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Much of the revenue collection shortfall recorded by electricity distribution companies is largely a function of epileptic power supply.

According to findings, in the past five years of its operation, Abuja Electricity Distribution Company (AEDC) recorded a shortfall in revenue collection, due to irregular power supply to its customers.

AEDC was among the 11 Distribution Companies (DisCos) privatised in 2013 and supplies electricity to households and industries in Kogi, Abuja, Nasarawa and Niger states. The investors Xerxes Global Limited, a Nigerian firm chaired by Ambassador Shehu Malami; CEC Africa headed by Engr. Emmanuel Katepa is the foreign core investor at AEDC.

Investigation by our reporter revealed that in the 12 months of year 2018, the average Aggregate of Technical, Commercial and Collection losses (ATC&C) was at 53 per cent.

Record of the company’s transactions from January, 2018 to December, 2018, obtained from the Nigerian Electricity Regulatory Commission (NERC) showed that February, 2018 had the highest ATC&C losses of 59 per cent while the least of 48 per cent was recorded in March, 2018.

This, according to experts, is quite on the high side considering the huge fund required to execute some capital demanding projects that are part of its mandate such as metering customers across its franchise area of the FCT and Nasarawa, Kogi, and Niger States.

The umbrella of the DisCos of whom AEDC is part, explained the ATC&C. The director of Advocacy and Research at the Association of Nigerian Electricity Distributors (ANED), Chief Sunday Oduntan told LEADERSHIP that the technical loss is the loss inherent in the operational process of receiving and distributing the energy. For instance, he said, “However insignificant, in the process of transporting power over a long distance, some energy is bound to be lost in transit.”

He said the commercial loss which is usually unaccounted for is the difference between the energy received by the distribution companies and the energy that is actually billed, caused by energy theft, vandalism and other illegal operations.

The collection loss which has become most disturbing results from unpaid bills or bills whose payment is not collected.

Why will people use electricity and refuse to pay?

Some electricity consumers in selected communities in the FCT and the states of Nasarawa and Niger who spoke to our reporter said at most times they feel discouraged paying the bills they get at the end of the month because the bills issued do not in any way commensurate with their consumption due to the erratic nature of the supply, even as others claimed they had not had light for months and would not be compelled to pay for a period of total blackout. Most of the problems were remotely linked to dysfunctional transformers.

In the Uke area of Nasarawa state, a resident, Emmanuel Achadu said the highly inflated bills he was receiving even as they hardly had light in the area made him to call for outright disconnection last year.

He said, “This estimated billing system is not helping matter at all. Initially, I was paying an average of N7,500 monthly, and all of a sudden, I started seeing N18,000, sometimes N21,000. I complained until I got tired, and they insisted on my paying the already issued bills before I could be heard.”

Achadu is one of those customers that would connect to AEDC’s power line until he gets a prepaid meter to end the estimated bill which he descried as ‘extortive’.

Another resident of Uke, Mr Solomon Ahigbe said he began to develop cold feet towards the payment of his bills which “NEPA” (AEDC) officials bring when he realised that the cumulative duration for “the on-and-off” light cannot be more than one week out of a month.

“I then discovered that fuelling my big generator which can guaranty light for me when I need it is better. As I speak with you, so many people are suffering this “NEPA’s” inefficiency in silence.”

He called on the regulator (NERC) to step in to curb the excesses of the DisCos while urging AEDC to work towards mass metering.

Emmanuel Idoko, a house owner in the New Nyanya area of Nasarawa State which is less than 30 minutes’ drive from Abuja’s city centre shared similar story. He said electricity supply in the area has witnessed its worst, even as the heat is becoming increasingly unbearable. 

The problem in his area became worse when their transformer broke down in November, 2018, ending the era of the erratic supply which the people of the area were managing and ushering in total outage.

“Only recently, they said they reinstated it, and within a day or two it broke down again even as it was only managing to give out very low voltage. Between then and now do you expect me to pay? Pay for what, the darkness? I don’t think that is possible anywhere,” he said.

According to him, enumeration officials of the AEDC came and pasted a sticker preparatory to metering sometime last year, “but up till now we have not seen any meter. I think they prefer the estimated billing so that even where and when electricity is not supplied, people keep paying”.

Another resident of the area, Mike Usoroh said since September, 2018, the area started recording very low voltage that could not even support the use of home appliances.

One evening in October, the light went out in an unusual manner “only for us to hear the following day that the old transformer which has only managed to serve the area erratically overtime got blown up.”

While some of the residents blamed the damage on excess load on the old transformer, others blamed ‘NEPA 2’ third parties who go to fiddle with the equipment as acclaimed custodians in furtherance of partnership between the community and AEDC.

Lamenting the situation, Mrs Georgina John who runs a shop of assorted drinks in the area said she has been spending a better part of her income buying ice blocks daily, calling on AEDC to quickly come to the aid of the community by installing a new transformer.

There are bordering communities of Niger state to the Federal Capital territory (FCT) under AEDC’s franchise. But the story is sour and similar. Many residents spoke to our reporter in Rafinsayin and Diko communities near Suleja town of Niger state. Aziz  Bako who lives at Rafinsayin said he stopped paying his electricity bills recently after he sat down, calculated and discovered the period of supply through a month was not up to one week.

He said, “Most times the light comes at night when we are asleep, and many times you get very low voltage which cannot power most of the appliances.

“So we are being exploited, and I have resolved not to pay again until I have meter,” Bako said frowning at the mention of AEDC’s plan to serve the community better.

An Abuja based electrical engineer, Samson Chukwuma said the use of obsolete equipment by most of the Distribution Companies (DisCos), especially the transformers is largely responsible for the epileptic power supply.

Chukuma also fingered poor transmission network as he said most of the transformers in use at many locations were planted over 10 years ago when the population of those it served was far less. He expressed worry about the 53 percent ATC&C losses of AEDC, considering the challenges of liquidity and the enormous task before the company. You cannot expect somebody who is not getting the light he is paying for most of the times to be happy paying the bills. That’s why you have people discouraged from paying their bills,” Chukwuma said.

AEDC confirms huge losses

When contacted on the huge losses, AEDC’s Head of Corporate Communication, Oyebode Fadipe, confirmed the situation but quickly blamed “customers apathy” towards payment of their bills. Fadipe said though collection cannot be 100 percent, the gap wouldn’t have been much if not for the poor attitude to payment of bills by customers.

He said, “There are instances where some customers don’t want to pay their electricity bills at all no matter what you do and that is the major reason for the collection shortfall you are talking about,” he said, adding that both highbrow and lowbrow areas are guilty of the unwillingness to pay.

Fadipe also identified energy theft through meter bypass and other criminal ways. “What that means is that you cannot account for such money at all but you have to pay the source for all the power that has been delivered to your network,” he noted.

Fadipe however declined to respond on how much the firm is losing to collection inefficiency but still blamed the situation for the snail pace of the company in executing some of its critical projects aimed at improving customer service delivery such as metering of customers, and installing more transformers.

On what AEDC was doing to resolve this, the spokesman said it has signed contracts worth billions of Naira to provide meters to all its customers to avoid the controversies usually generated by the estimated billing methodology.

—supported by Daily Trust Foundation in conjunction with MacCarthur Foundation

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