By Michael Owhoko, Ph.D
The unending darkness permeating Nigeria today, unarguably, was the mistake of 2013 when majority
stakes in the electricity distribution companies (DISCOs) were sold to private investors as part of larger
efforts to improve electricity supply, which was hitherto, disrupted by constant power failure across the
country.
Unfortunately, after 12 years of practical operations, these private investors have turned out to be
technically incompetent with severe illiquidity challenges that weaken their capacity to perform,
demonstrate competence, and deliver electricity satisfactorily to customers in line with policy and public
expectations. Worse still, nothing suggestive that the DISCOs can improve in performance and
efficiency, translating into a burden for Nigerians, in the absence of government’s interference.
By their poor conduct and performance, the DISCOs have undermined the intention and objective of the
Federal Government’s electricity reforms which was aimed at strengthening the power sector through
private sector participation for delivery of efficient and quality service. The reforms which started with
the enactment of the Electric Power Sector Reform Act 2005 (EPSRA), led to formation of the Nigerian
Electricity Regulatory Commission (NERC) and creation of the Power Holding Company of Nigeria
(PHCN). The PHCN was later segmented into Generation, Transmission and Distribution, from where the
DISCOs were created.
The reforms were essentially necessitated at the time by constant power failure induced by poor
condition of network of power assets, including moribund facilities and equipment together with
government’s poor handling and management of the electricity sector. These challenges were identified
as obstacles impeding efficient and regular supply of electricity to consumers, leading to eventual sale of
six GENCOs and eleven DISCOs to private investors.
So far, the DISCOs have failed to inspire public confidence, as they often attribute their failure to
inherited obsolete and unviable equipment, a defence mechanism evidently too weak to attract public
sympathy. Inability of the DISCOs to identify from the outset, the depth of facility decay before agreeing
to take up responsibility for the job, exposes the gaps in their technical knowhow. And failure to replace
most of the moribund equipment and facilities, is a confirmation of their poor financial health, a factor
that should have been activated for their disqualification.
Perhaps, as device to mitigate this financial deficit, DISCOs resort to sharp practices, using estimated
billing, varied service bands, passing incidence of cost relating to faulty equipment replacement to
consumers and unjustifiable blackout.
For example, consumers are fraudulently asked by DISCOs to pay for faulty distribution facilities and
equipment, including wires, cables, conductors and transformers, despite leveraging government and
banks. Even after compelling consumers to fund replacement of faulty equipment, ownership of such
assets reverts to the DISCOs. Yet, no payment waiver or concession is extended to customers for
electricity consumed.
Implicitly, consumers indirectly bear part of the DISCOs’ operational cost despite payment for electricity
bills. And because the consumers are caught up between the deep blue sea and the hard rock, the
DISCOs have now made it a bureaucratic culture to make incessant demands to consumers for
replacement of faulty lines and equipment, including transformers. Field electrical engineers of the
DISCOs capitalized on this unwholesome practice to constantly push cost of maintenance down the
throat of consumers.
Besides, estimated billing has become part of DISCOs’ trick for defraying cost of operations. Consumers
are billed based on estimation as against prepaid metering, a preferred option to support their balance
sheet. This explains why the process for obtaining prepaid meters is cumbersome and frustrating. Even
where the prepaid meters are available, the DISCOs deliberately make the issuance process difficult, just
to discourage consumers.
Categorization of consumers into different bands is also a strategy to shore up revenue, particularly in
Band A. This category of consumers is allocated a minimum of 20 hours a day, but receive less supply
quality, despite associated high tariff of about N207per kilowatt/hour (KWhr).
Consumers that are migrated to bands B, C, D and E also complain of inadequate supply that is not
commensurate with their service bands. From approved minimum, Band B is entitled to 16 hours, Band
C – 12 hours, Band D – 8 hours, and Band E – 4 hours per day, yet, blackout persists with supply at
variance with approved service minimum in the different bands. It appears to be a ruse designed to
fleece consumers.
This inefficiency has so negatively robbed off on the DISCOs to the extent that their reputation and
public trust have waned. It is so bad that, for example, pickup ladder trucks conveying field workers of
DISCOs, now conjure image of crooked personnel going around to extort consumers over non-existent
faults. The presence of these field engineers trigger apprehension among consumers over possible
alteration of electricity balance. All these are in violation of regulatory operating standards as depicted
in the Key Performance Indicators (KPIs) set by NERC. The KPIs are metrics designed to measure
performance of the DISCOs.
When organizations entrusted with responsibilities to deliver electricity to final consumers have
consistently failed to achieve target, resulting in poor quality of life and business downturn, with
implications on gross domestic product (GDP), government has the obligation to mediate, and put the
sector on a new trajectory to guarantee improved and regular supply of electricity.
This is where the NERC, which was established to oversee the activities of the DISCOs, is expected to act
on behalf of government to compel them to operate within the framework of the established KPIs,
through regular monitoring and enforcement of compliance. The KPIs include management
accountability, increased operational performance, improved electricity delivery, customers’ service
satisfaction, metering, customers’ complaints resolution, estimated billing and quality of service
delivery.
But so far, the NERC has not lived up to its billings as evident by failure of the DISCOs to meet their KPIs,
coupled with flagrant display of nonchalance, impunity and inexperience. Besides 5% reduction in
operational expenditure as penalty for non-compliance with energy offtake, no serious sanctions have
been slammed on the DISCOs, a gap they have been exploiting to perpetuate darkness in the country.
Put differently, apart from management accountability which is beyond consumers’ determination,
other KPIs are observed more in breach by DISCOs than in compliance. For example, there is noimproved performance and increased power delivery to consumers. There is also poor metering system
fueled by non-availability or indiscriminate issuance of meters, as well as estimated and delayed billing.
Besides, consumers are also compelled to pay for equipment, including cables and transformers. These
are part of growing customers’ dissatisfaction over poor services by DISCOs.
While power generation companies (GENCOs) and Transmission Company of Nigeria (TCN) are not
immune from the general inefficiency web of the power sector, if the approximately 5,000 megawatts
(MW) of electricity currently generated was optimally and efficiently distributed by DISCOs, using
functional and reliable equipment and facilities, the magnitude of blackout currently being experienced
in Nigeria would have been slashed.
The spotlight on the DISCOs is informed by their crucial role in the electricity supply value chain. They
deliver electricity directly to consumers which provide them the opportunity to interact with customers.
The GENCOs and TCN do not interact directly with consumers, and this removes these organisations
from public attention despite their importance in the supply value chain.
In other words, the DISCOs are the barometer the general public and consumers use in measuring the
power sector performance. Regrettably, none of the DISCOs has shown excellence in their performance,
including Abuja Electricity Distribution Plc, Benin Electricity Distribution Plc, Eko Electricity Distribution
Plc, Enugu Electricity Distribution Plc, Ibadan Electricity Distribution Plc, Ikeja Electricity Distribution Plc,
Jos Electricity Distribution Plc, Kaduna Electricity Distribution Plc, Kano Electricity Distribution Plc, Port
Harcourt Electricity Distribution Plc and Yola Electricity Distribution Plc.
The DISCOs are today, part of major reason Nigeria is referred to as a “generator republic”. Until the
DISCOs are dissolved and replaced with technically competent investors who are ready to invest heavily
in distribution equipment and facilities, homes and industries will continue to suffer from poor
electricity supply, posing serious threat to government’s planned provision of reliable and sustainable
electricity. In other words, let the DISCOs die so that Nigerian can have light.
Dr. Mike Owhoko, Lagos-based public policy analyst, author, and journalist, can be reached at
www.mikeowhoko.com, and followed on X {formerly Twitter} @michaelowhoko.
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