No to increase in electricity tarrif

THE demand, the other day, by the House of Representatives that the proposed increase in electricity charges be stopped is both timely and justified. There is no reason for such an increase until the distribution companies (Discos) improve their services and address the many complaints against them by both consumers and the National Electricity Regulatory Commission (NERC).

Prominent among the complaints against the Discos is the arbitrary imposition of consumption charges that are not just high but unreasonably so. From Abuja through Kaduna to Lagos, there is hardly a Disco that has not been picketed by angry consumers because the companies have stopped reading perfectly functioning electricity meters. Instead, the Discos literally prepare bills according to their whims, but essentially to sustain projected revenue, for which they have not provided service.

The point cannot be over-emphasised that, from the way the  electricity companies –generating, transmitting, and  distributing – have carried on since they took over the  respective sectors of power supply, these  organisations have shown they are ill-prepared  for the task that they accepted and indeed paid  substantial sums of money for. And to date, they have not proven their capability to manage their businesses in line with international best practices. This is hardly surprising. The managing director of a Disco is reported to have said that he and his colleagues did not have the opportunity to study the system before taking it over. Also, the Managing Director of Nigerian gas Company, Saidu Mohammed reportedly told the House of Representatives committee on gas that  several independent power plants were already completed before the owners began talks on the supply of gas to drive them. These surely do not signpost the best of business plans.

Power supply remains abysmally inadequate and erratic, improving only marginally, and in fits and starts.  Worse still,  the new private operators have resorted to literally reaping where they have not sowed by sending prohibitive bills to hapless consumers who must therefore abandon their work and businesses to seek clarification or march in protest against what is patently an attempt to defraud them.  Furthermore, the companies have sustained a so-called fixed charge that extracts money from consumers as monthly payment for an installed meter which by the way, the consumer paid for in the first place; directly or otherwise. Not surprisingly, the NERC has been busy keeping them in line with the terms and conditions of the purchase of their respective facilities, besides having to, every so often, settle disagreement with aggrieved consumers.

Customers have received no satisfactory explanation for these bills; and those who protest are simply told to pay first or be disconnected. Despite the assurances of the Discos on delivery of pre-paid meters, consumers are yet to feel the impact, as the processes seem to take eternity. That the Discos are having a problem with the procurement and distribution of pre-paid meters is indeed strange and suspicious, because as much as N2.9 billion  in Multi-Year Tariff Order I was reportedly released, as subsidy by government , as far back as 2012,  to procure meters. What did these companies do with the money?  Second, a local company that manufactures these meters claimed that its warehouse is full to the brim with unsold meters. The firm has even threatened to shut down and lay workers off if it cannot sell its product which, by reasonable expectation, the Discos should pick up. Government directed the Discos to do so but it does appear they have not.  Third, early this year, the Central Bank of Nigeria (CBN) gave a N39.527 billion loan to the four electricity generation  companies and others to, in the words of  the CBN governor, ‘catalyse the  power sector [including ] the procurement of … equipment  and metering… which  should  ultimately impact on the economy of Nigeria.’ It is to be repaid in 10 years at 10 per cent annual interest. Again, what have the beneficiaries of this public funding done with the money?

These reasons and more justify periodic performance audit of these electricity companies in order to protect public fund as well as keep them on their toes. Going by experience in the telecommunication sector, the pre-paid billing mechanism would be most convenient for both service providers and consumers.

The new operators of the power sector have so far failed in expectations of improved and fairly priced power supply; they are giving an unwholesome name to the private sector’s reputation for ethical management and efficient performance. Their poor performance tends to lend credence to suggestions by some persons that government should take back control of the sector. The arrogance with which these power companies behave is unbecoming of responsible corporate practice, and is unacceptable. This is hardly a respectable way to do business.

The Discos must not be allowed to continue to violate the rights of consumers, contrary to well known rules of ethical business conduct, and with so much disrespect for regulatory bodies. The NERC’s mechanism through which dissatisfied customers can seek redress is instructive and should be strictly enforced. The power companies should cue into the mood of the public, which is intolerant of business-as-usual attitude.