But expectedly, apart from NERC, generating and distribution companies – GENCOs and DISCOs – every facet of the Nigerian populace kicked against the tariff increment, especially in the face of dwindling supply of power to consumers.
Justifying the tariff increment, NERC Executive Chairman, Dr Sam Amadi, said his agency has consulted and agreed with all relevant stakeholders to hike tariff to reflect ongoing market rate. However, it is certain that consumers are not seen as relevant stakeholders in the power sector, as no consumer will agree with other stakeholders to hike price, especially at this critical period of economic downturn.
Ironically, NERC has always continued to increase price of electricity even when the rate of power continues to drop drastically. Unfortunately, government also continues to give lame excuses and condone such arbitrary hike in electricity tariff to the detriment of the people it pledges to serve.
With the new tariff, scheduled to take off February 1, electricity consumers in R2 class, said to be under residential, are ex¬pected to pay N24.30 per kilowatt in Abuja; N24.08 in Benin; N27.13 in Enugu; N23.09 in Ibadan; N26.93 in Jos; N27.36 in Ka¬duna and N28.05 (in single phase and three phases); Kano – N20.26 and N26.41; Ikeja
– N21.30 and N21.80; Port Harcourt – N24.91; Eko – N24.00 and 25.79; N23.25 in Yola and N24.75 per kilo¬watt.
Residential customers under R2 class within Abuja Electricity Distribution Company will no longer pay N702.00 as fixed charge every month; their charge will instead, increase by N9.60 per KWh. For R2 customers in Eko and Ikeja Electricity Distribution zones, they will pay N10 per KWh and N8 per KWh, while also forgoing the N750.00 fixed charges.
For Kaduna and Benin consumers, the N800/N750 fixed charges will be abolished while they will get an increase of N11.05 per KWh and N9.26 per KWh respectively. Com¬mercial consumers in C2 category in Ibadan and Enugu will also no longer pay fixed charges of N17,010 and N22,141 respectively, but they will suffer energy charge increase by N12.08 per KWh and N13.35 per KWh respectively.
Although, the Minister of Power, Babatunde Fashola, while throwing his weight behind the tariff increase, explained that the increase will boost investment in the sector, adding that as soon as more investors bring mon¬ey into the sector, the cost of electric¬ity consumption may decrease in the near future, Nigerians from different walks of lives have continued to kick against the increment.
Members of the Manufacturers Association of Nigeria (MAN), la¬mented the increment, averring that the hike, unaccompanied with the supply of prepaid metres to consum¬ers to measure what they consume monthly is another way of exploiting the people.
But while there have been objections to the tariff hike, some stake¬holders in the industry continued to justify it. One of such is the Chairman, OTL Africa Downstream, Mr Emeka Akabogu, who while ap¬pealing to Nigerians to see the tariff hike objectively, noted that the hike “made absolute sense.”
He said: “Availability of electricity has been probably the most in¬tractable problem the country has faced. There is limited availability of electricity, so the use of the limited amount available has to be maxi¬mised. At the same time, the available electricity needs to be increased through deliberate investment in the crucial areas of generation, transmission and distribution. Pricing is an excellently effective means of achieving these twin imperative.”
He said paying more for electricity by consumers will increase the earning capacity of operators and the possibility of enabling their increased investment and also ensure that users of electricity are more circumspect in their use, thereby making surplus available for even more people.
As Nigerians continue to groan under the present adverse economic quagmire, perhaps bringing home the experience of the people will suffice. The principal of a private school located in a quiet suburb in Abuja allegedly gave one of her junior staff N3,000 to purchase prepaid credit for the prepaid meter in her residential apartment.
Spending N300 on transporta¬tion, the staff allegedly bough credit worth N2,700, which would in the past procure 158 KWh units which, according to her lasts for about two weeks for the family, but this time, the N2,700 worth of power only procured 90 KWh units, which will hardly last one week.
To her, she is even lucky to have a prepaid metre as over 80 percent of power consumers do not have such luxury and their fate is decided by power officials who estimate bills as it catches their fancies. But what is even worse, according to The AUTHORITY on Saturday investigations, was that there has not been any improvement in power supply as to justify any 45 percent increment in tariff.
It was discovered that if the DISCOs had invested into the gamut of electricity quotient as they should, the cost of electricity would have crashed, but since they are not will¬ing to invest a dime, the NERC has become a willing ally to squeeze the Nigerian consumers dry, as long as ‘something goes into the pockets of the regulators’.
Many Nigerians are not in doubt that the latest hike in tariff was one of the many devious ways of short¬changing consumers by the DISCOs and their collaborators in NERC, just to continue to sustain their ostenta¬tious and profligate lifestyle, which has now come under the hammer by the global economic glut and the drastic fall in the global price of crude oil.
This is apart from other various schemes that the DISCOs have devised to fleece consumers of their credits purchased with their hard-earned money by constantly taking off and returning light. An insider revealed that the computer unit has been asked to create a programme which withdraws certain amount of credit from every consumer each time light is taken off.
A credible source at the Abuja Electricity Distribution Company told The AUTHORITY on Saturday: “In that way, every commercial unit meets its revenue quota. And you know that these revenue target are met through those who purchase to¬kens.”
But as arguments and counter-arguments have continued to trail the purported increase, the National Assembly has ordered a reversal to the status quo. This was just as Fashola has declared that there will be no going back on the increase, even as electricity consumers have contin¬ued to complain of inadequate power supply and in some cases, absolute blackout for months on end.
Only this week, the Senate, as a fol¬low-up to its earlier directive, directed the NERC, the Ministry of Power and DISCOs to immediately suspend the increase, which allegedly kicked off on February 1.
Suleiman Nafiz, representing Bauchi North, had moved a motion, urging the probe of how funds given to electricity companies had been spent by the Senate, saying: “The Distribution Companies (DISCOs) have continued to exploit Nigerians by estimated billing system and delib¬erately refusing to make prepaid me¬ters available.
“This increase will pave way for additional heavy burden on Nigerians and coupled with the challenges of the economy. It will affect the purchasing power of Nigerian workers.”
Supporting Nafiz’s motion, the Deputy Senate President, Ike Ekweremadu, said: “As a country on life support, we do not need to add to the suffering of the people. For me, this tariff increase is ultra-wicked and unconscionable. We must reverse it immediately.”
The senator representing Kogi West, Dino Melaye, noted that the latest increase in electricity tariff was the fourth since the privatisation of power and called for its reversal immediately, saying: “We ask for an immediate reversal of the 40 percent increase in electricity tariff because it is arbitrary.”
Meanwhile, on Monday, Febru¬ary 8, organised labour, which had been looking for avenue to take on the Muhammadu Buhari-led Federal Government, had protested the new tariff hike across the 36 states, mak¬ing clear its discontentment with the hike.
Decsribing the action as “morbid intention”, the President, Nigerian Labour Congress (NLC), Comrade Ayuba Wabba, deplored the role of NERC, which he accused of conniving with the DISCOS and GENCOs to hoodwink Nigerians. Wabba accused NERC of colluding “with the DISCOs to exploit Nigerians.”
He said: “This is outrageous, this is the extended corruption that Mr President must fight headlong. Any Nigerian that has been given an esti-mated bill should not pay. People that have bought the PHCN, we are aware some of them are incompetent and cannot drive.
“The consultation was only restricted to the families and cronies of those who bought the companies. We call on Mr President to quickly put on the board of this commission. A lot of companies are going under because there is no electricity to power. Instead of increasing tariff, let generation be increased.”
At NERC headquarters in Abuja, where the protest also took place, the President, Trade Union Congress (TUC), Boboye Kaigama, threatened that failure of the government to heed the demands of organised la¬bour woyuld push the union to resort to self-help.
He said: “The next time we come here, we will occupy this office. It is our collective wealth; if they are con¬niving with the DISCOs and GEN¬COs to deprive Nigerians of electric¬ity, to deprive Nigerians of equity, it’s a right not a privilege, if NERC can¬not do its work, organised labour will do it.
“Today, we are here witnessing the change that we voted for and the change is bringing darkness for us. We didn’t vote for a change that we will see darkness at the end of the tunnel. We voted for change to see light at the end of the tunnel. If the rule of law cannot perform, self-help will perform.”
Tackling the Minister of Power, Fashola, Kaigama said the increase was carried out without recourse to the position of the organised labour, arguing that “if the tariff is not reversed, we are prepared to take over all the DISCOs. We haven’t seen where a legal luminary will disobey the orders of the court.”
Taking their protest to the National Assembly, where they were welcomed by the Senate President, Bukola Saraki, Senate Leader Ali Ndume, Senators Melaye, Andy Uba, among others, organised labour prevailed on the lawmakers to compel the executive, Fashola in particular, and NERC officials to maintain the status quo.
Presenting the labour union’s case and grievances to the National Assembly, Wabba said: “Governance is about the good of the people. The companies were privatised five years back, we expect that by now they must have added value, but instead of adding value, they try to exploit Nigerians by increasing the tariff.
“For the past five years, tariff has been increased. What makes this increase outrageous is that it is an increase from N14 to N24 per unit; between 45 percent to 60 percent. We have made the point very clear in this difficult economic situation, it is difficult for Nigerians to swallow this very bitter pill. Nigerians must be carried along in every policy.
“The best thing is to let the law be strengthened, where tariff cannot be increased unilaterally. Everywhere in the world, people pay for what they have consumed. Tariff must be matched with the quantity of electricity consumed. (Here,) whether you have light or not, you pay, you even pay for darkness, we are also paying for inefficiency. The authorities must listen to the cries of the masses. We are here so that this issue can be resolved. We are also demanding that this tariff must be halted.”
Leader of the Civil Societies Coalition and former President of Academic Staff Union of Universities (ASUU), Dr Dipo Fashina, urged the National Assembly to put a stop to all privatisation of public enterprises that have been sold to private individuals, explaining that the ongoing crisis emanated as a result of disobedience to the constitution.
He said: “The Constitution of Nigeria stipulated that the commanding heights of the economy shall not be in private hands. But now, virtually all the commanding heights of the economy have been sold out to private individuals.
“We want the Senate to reverse the tariff immediately, apart from that, the Senate must protect the poor. Majority of Nigerians cannot afford
the evil that is going on. Stand out and reverse all the privatisation of all our roads, airlines, Ajaokuta Steel, among others.”
Responding to the protesters, Saraki said: “I want to assure you that the 8th National Assembly is for the people. You will recollect even before now that we too have observed that this issue and some of the tariffs were not palatable. Hence, we summoned the NERC. Even before now, we were with you; we stand with you and we will ensure that no policy will in any way not be palatable to the masses and the people. Yes, we want more power; yes we want more power improvement but not at the detriment of the masses.”
Saraki agreed with the protesters that “there must be consultation, because we are here at your instance and it is by virtue of you that we are here. We cannot make laws or policies without the people. I want to assure you that the 8th National Assembly will always stand for what will ensure the survival of the masses. We are not blind, we are not dull, we can see the problems. Give us time, we will call the executives, we will engage with them. We will do it immediately. We are people here for action, and you will see the action immediately. Part of the action is to come out here, to stand before you to make a commitment and you will see the action. We are of the same generation.
“Time is gone for that nonsense, the time is a new path, a new di¬rection. Everybody’s eyes are now opened, nobody can fool anybody. I can assure that nobody will deceive the masses. We will consult with you, we will do the right thing. We will agree where we have to agree. And at the end of the day whatever we do will be in the interest of the people of Nigeria.”
It was perhaps a follow-up to this pledge that made the Senate to order a halt of the tariff hike. But the end seems not yet in sight, as in reaction to the protests across the country against the electricity tariff hike, the Federal Government and NERC explained that it was in the best interest of the country that electricity tariff was increased.
NERC indicted organised labour for what it called labour’s failure to “maximise the opportunities it pro¬vided during the tariff consultation period to lodge its complaints, while the Federal Government, speaking through Fashola, said the decision, though tough, was necessary.
The regulating agency, speaking through its acting head, said that the tariff framework had a democratic window of 60 days within which any one that is upset with the rates can appeal to it, adding that such complaints would be honestly attended to.
It said: “We had expected that organisations such as the labour union would take advantage of the 60-day window available to anybody to contest the tariff before heading into the streets in protest.
“Anyhow, they have exercised their democratic rights, but we also feel that they have not exhausted an already existing democratic measure to ask for any redress in the new tariff.
“The protest, in our view, when they have not taken advantage of the 60 days window, was totally unnecessary because they will just heighten up the uncertainty that we are trying to minimise in the sector because we are also exposed to foreign financial investments in the sector. They should have also been mindful of the fact that this is before a compe¬tent court of jurisdiction and restrain from such acts. They would have exhausted the democratic opportunity in the tariff.”
On his part, Fashola said that though the decision was a hard one, his ministry was pushed to that stage by the thought that the country’s elec-tricity system would collapse without a cost reflective pricing regime. He said at a meeting in Lagos that: “It is a hard decision, but we appeal to all for understanding because we are doing it in the interest of all the people. We do not have many choices but we promise that it will get better.
“It is important to also state that the stability we have experienced in the market is comforting and we must do everything to protect it. That stability is giving confidence to the banks, to the gas investors, to the GENCOs and a lot of them are coming into Nigeria. They want to participate in power and it’s because of the stability that the government and leadership of the president have provided and we must do everything to protect that stability.”
While NERC urged labour to, rather than waste time on protests, demand for improved efficiency in the power sector, which it said the new tariff regime would bring, Fashola asked them to embrace productivity rather than starting what he called a ‘disruptive fight’.
Be that as it may, the end is not yet in sight, as labour has vowed to resist the new tariff increment with everything in its arsenal. Analysts and experts in the power sector also opined that government haphazardly packaged the tariff hike and used its agencies to dump it on the people.
For once, the National Assembly seemed to be on the side of the people in this case and stakeholders expect that it would mediate effectively between the warring stakeholders and bring them to the negotiation table and resoleve this imbroglio.
But one thing is certain, public opinion seems tilted unfavourably against the tariff hike, not only because of the economic crunch the people are experiencing, but majorly because of the poor state of power supply and the inability of the DIS¬COs to provide prepaid metres for consumers and their inability to provide proper and adequate billing to all consumers of electricity.
Many consumers expressed their consternation with Fashola and the NERC and the way they are going about defending what they called an ‘obnoxious policy.’ A consumer, Adewale Ojo, described as worrisome, “the way Fashola is defending this ‘DISCO dancers’, saying: “I wonder if government is out there to protect the so-called investors or the people they claim to represent. Why does this man want me to pay more for darkness? I believe there was an agreement the cheating investors had with the Nigerian government concerning metering; Fashola has nothing to say about this. Anyway, I don’t blame him; I wonder if he has been paying electricity bill for the past eight years.
“An increase in tariff is not commensurate with increase in power supply. The DISCOs have just been given a license to bill consumers anyhow, especially with the fact that most homes/offices do not have pre-paid meters. This minister is a bourgeoisie minister, who do not care about the people, but on the side to enrich the rich.”
Another consumer, Emmanuel Malubo said: “This Fashola is wonderful! So, there should be 45 percent increase in tariff, but nothing about a guaranty in quality of service from the DISCOs! This is simply amazing. It looks like there is something in the office of the minister that makes them to begin to look at issues from the perspective of the exploiters.”
Another customer who pleaded anonymity said: “One day ‘on’ and one day ‘off’ electricity tariffs! That is, if you are lucky to get supply at all. One of the problems is the centralization of everything. A situation where if there is a fault at Shiroro dam in far away Niger State, there will be power failure in Calabar, Benin City, Warri etc.The public deals directly with the DISCOs who have no control over generated power or transmitted power. The system is all so complex that you really need professional engi¬neers at the helm of affairs up to and including the Minister of Power for the entire system to work properly.”
Economic watchers believe that one of the main problems of power in the country was the inherited ineffective and exploitative service of the Power Holding Company of Nigeria (PHCN), with obsolete transformers, old cables, old poles, old substation facilities, outdated meters, corrupt staff, daily agitations by staff, estimated bills, ramshackled offices and en-gagement of non-professionals who mismanaged PHCN to mention but a few, by the investors in the power sector, which still remain with them.
Most inherited staff of the defunct PHCN believe that it is still business as usual and continue to run the new business like the old PHCN, without any improvement in the services rendered. This has led to a situation where consumers who do not have power supply for over 30 days get billed for same period.
In most cases, these old staff go about disconnecting consumers from power, and in the process, collect part payment from some gullible consumers, which are not remitted to their accounts, but end up in private pockets. Also disturbing is the situation where consumers pay for everything, including replacement of cables, fuses, repair or outright re-placement of transformers, in some cases, without any improvement in the supply of power, which had remained epileptic in most cases and in most areas of the country.
But even as the controversies rage, it is instructive to state that there is a subsisting court order dated May 28, 2015 given by Justice Mohammed Id-ris of the Federal High Court, Ikoyi, Lagos, in the case between Toluwani Yemi-Adebiyi and NERC and others, prohibiting any further tariff incre-ment until the determination of the substantive suit.
This was just as Justice Idris fixed last Thursday for hearing of an ap-plication for a stay of proceeding in the suit. Mr Yemi-Adebiyi had earlier informed the court of his application seeking to commit NERC chairman and CEOs of the DISCOs to prison, for allegedly disobeying the court order which stopped any hike in electricity tariff until the final determination of the suit.
He disclosed that it was important and compelling for the court to hear the contempt charge as the defendants had disobeyed a subsisting order by implementing the new tariff, showing that the substantive suit means nothing to them, adding: “My Lord, even though the matter was adjourned till today for the hearing of the substantive suit, the defendants have decided to take the bull by the horn by increasing the electricity tariff contrary to the order of the court. Consequently, Forms 48 and 49 have been filed so as to allow the defendants to purge themselves of contempt.”
But, NERC’s lawyer, Chief Anthony Idigbe (SAN), urged the court to dismiss the charge, saying: “We have an appeal against the order and there is a motion for stay before the court. The plaintiff has not effected personal service of Form 48 on the alleged contemnors and he has gone ahead to file Form 49. I think the proper thing for the court to do is to commence the hearing of the substantive suit.”
Ruling on the case, justice Idris said: “It is in the interest of justice to first hear the defendant’s application for a stay of proceedings, pending the determination of their appeal against the court’s order.”
The coming days will tell how both labour and government resolve this issue. Who blinks first? Will government back down and retrace its steps or will organised labour be capitulated and give up the struggle to fight? Or will the Nigerian people take this and allow the hike to remain?
Electricity tariff hike brouhaha: Who blinks first?
![Electricity tariff hike brouhaha: Who blinks first?]()
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Saturday, February 20, 2016
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