The Nigerian Electricity Management Service Agency (NEMSA) says the maximum failure rate it would allow in the testing and certification of meters for use by Electricity Distribution Companies (DISCOs) would be 7.5%.
NEMSA stated that if the failure rates of meters, which the 11 DISCOs brought to its testing station were above that level, it would condemn the quantities of such meters and subsequently ban it from being deployed to homes and offices.
The Managing Director of NEMSA, Mr Peter Ewesor, issued the warning on Wednesday during a press briefing in Abuja, Nigeria’s capital.
Mr Ewesor stressed that the briefing was organised to sensitise electricity consumers in Nigeria on the standard expectations from the meters that DISCOs install in their homes and offices.
He explained that it was the job of the DISCOs to provide meters to their customers while consumers were to verify the authenticity and working conditions of meters supplied and installed.
The NEMSA boss noted that undertaking such task would ensure that consumers do not lose money from incorrect meter readings and energy losses.
The Minister of Power, Mr Babatunde Fashola (SAN) has attributed the drop in electricity supply from 5000 MW to 2000MW since February 2016, to incessant attacks on gas pipelines by vandals.
He said this while delivering a key note address he delivered at the second edition of the National Council on Power (NCP) Stakeholders meeting in Kaduna State.
Speaking on how to address the current poor electricity supply across the country, Mr Fashola advocated alternative power sources such as solar, wind energy, coal to complement existing hydro and gas.
On his part, the host governor, Mr Nasir El-Rufai asked the Federal government to retain the transmission sector and privatise the DISCOs and GENCOs.
The governor also advocated the restructuring of the National Electricity Regulatory Commission (NERC) in order to make it more proactive and effective.
In doing this, he stated that competent and experienced experts should be engaged to man the regulatory agency.
He specifically urged the Ministry of Power and other stakeholders to consider solar energy since it is cheaper and efficient, adding that Nigeria is blessed with abundant sun which could transformed into solar energy.
The 2nd edition of the National Council on Power stakeholders meeting had the theme “Achieving Incremental, Then Uninterrupted Power” was organized by the Ministry of Power, Works and Housing.
The NCP stakeholders meeting provides a platform for the ministry to interact with all stakeholders in the power sector in order to provide a road map to address the challenges in the sector.
Nigeria’s Minister of Power, Works and Housing Mr, Babatunde Fashola, has urged electricity distribution companies to patronise local meter manufacturers in the quest for mass metering system of their customers across.
At the 6th Power and Stakeholders Monthly Meeting held on Monday in Kano State, North West Nigeria, the Minister said the patronage of local manufacturers would help avoid foreign exchange problem associated with importation of meters.
Mr Fashola stressed that it would greatly save cost if made in Nigeria meters were patronised, pointing out that it is of same quality with the imported ones.
He believes that proper synergy between operators at the highest executive management levels, generating companies, distribution companies, transmission companies and various relevant government agencies would provide sustainable solution to the nation’s power problem.
On the low supply of power currently being witnessed across Nigeria, Fashola told reporters that the activities of the Niger Delta Avengers had dropped power generation from 5,000 to about 3,000 megawatts.
“As of today, Nigeria rely only on hydro power from Jabba and other formations whose gas is not totally out,” he said.
The militant group in Niger Delta region have claimed responsibility for most attacks on oil facilities in the region, crippling exploration activities.
The meeting agreed that in furtherance of aggressive metering plans, all distribution companies should embark on a sensitisation campaign to enable customers understand the need for metering system.
At the meeting were operators and stakeholders of the Nigeria’s electricity industry and it was chaired by Mr Fashola.
The monthly meeting according to the minister was initiated to identify, discuss and find practical solutions to issues facing the Nation’s power sector.
Presenting a communique at the end of the meeting, the Managing Director of the Kano Electricity Distribution Company, Mr Jamilu Gwamna, said the meeting acknowledged the need to put in place a more robust mechanism on information sharing between the Federal Ministry of Power, Works and Housing and generation and distribution companies as well as other stakeholders in the electricity industry.
The government of the United States of America has signed a memorandum of understanding with Nigeria’s government to improve electricity supply.
The partnership which is expected to inject nine million dollars annually into the sector is also expected to provide technical support to the distribution companies.
Representatives of electricity distribution companies, the Ministry of Power and the American government, all witnessed the signing of the agreement between the U.S government and electricity distribution companies.
The U.S Ambassador to Nigeria, Mr James Entwistle said that the partnership is aimed at opening up business opportunities in Nigeria, as access to electricity would reduce the cost of doing business in the country.
Away from the business opportunities the partnership will provide, representatives of some electricity distribution companies at the event asked the U.S government to help build their capacity to distribute power and collect tariff from consumers.
The Minister of Power, Works and Housing, who was represented at the event by his SSA, Lanre Akinsola, said that government is making efforts to relieve the sector of its over-dependence on gas.
Electricity generation and distribution has dropped below 3,000 megawatts in recent times, causing perpetual darkness in some parts of the country.
Often, the Ministry of Power has blamed the sharp fall on acts of vandalism of gas pipelines and other installations across the country.
The Federal High Court Sitting in Lagos has fixed May 31 to rule on the preliminary objections filed by the Eko Electricity Distribution Company, The Nigerian Electricity Regulatory Commission and the Attorney General of the Federation.
They are all listed as defendants in a suit filed by some aggrieved residents of Itire, Ijesa and Ikate communities in Surulere area of Lagos State.
The resident staged a peaceful protest in court on Monday to condemn the high electricity tariffs which they say does not match supply.
Justice Saliu Saidu has listened to the objections of the defendants who have challenged the jurisdiction of the court to hear the suit.
Counsel to the plaintiffs, however, said that the Federal Government needs to review the privatization process.
Electricity supply through the national grid is now ramping up as it attains 4,387 megawatts peak generation as at Friday, March 4, 2016 with a prospect for further improvement in power supply situation.
The Head, Public Affairs Department at the Nigerian Electricity Regulatory Commission (NERC), Dr. Usman Abba Arabi, said that this is following successful repair work on the damaged gas facility earlier in the week.
“It would be recalled that the peak generation level that notched epoch 5,070 megawatts few weeks ago suddenly nosedived due to inadequate gas supply on the main gas pipeline supplying many of the power stations.
“This was on account of gas supply shortage due to inability to evacuate condensates and oil produced with the gas because the main oil export pipeline out of Forcados was vandalized two weeks ago.
“However, with the successful repair work on the damaged facility, the system is now ramping up as it attains 4,387 megawatts peak generation as at Friday, March 4, 2016,” he said.
The acting Chief Executive Officer, Nigerian Electricity Regulatory Commission (NERC), Dr. Anthony Akah, has subsequently appealed to members of the public to cooperate with electricity industry operators and security agencies to stem the recent incident of vandalism on electricity installation.
He also warned the electricity distribution companies that the momentary downturn in supply should not be used to exploit unmetered electricity customers on estimated billing saying, “Customer bills for unmetered customers should be as accurate as possible and reflect their actual consumption. It shall in no circumstance be arbitrarily inflated.”
According to him, “The reduction in power supply when it lasted affects both metered and unmetered customers. For metered customers the drop in their consumption will be captured by their meter. For unmetered customers it is imperative that estimated bills during this period are reflective of their actual consumption.”
He further directed electricity distribution companies that unmetered and estimated customers have the right and option to pay current estimated electricity billing based on their last undisputed bill where there are concerns with the current estimated electricity bills.
He said that electricity distribution companies should ensure diligence and professionalism in the estimation of unmetered customers based on the provisions of the Billing Estimation Methodology Regulations, 2012.
He hinted that the Commission has deployed monitoring teams to report any act of negligence and extortion.
A Power Expert has faulted the Nigerian Electricity Regulatory Commission (NERC) and the Distribution Companies (DISCOs) over increments in the electricity tariff.
Mr David Aderibigbe was speaking on Channels Television’s Sunrise Daily on Wednesday.
“There are conditions and variables that must be affected in the economy before you can have a minor or major increment in the electricity tariff.
“The minor review involves: exchange rate, variability inflation, gas pricing and perhaps, the cost of generation and transmission,” he said.
The Professor of Mechanical Engineering suggested that the DISCOs should have rated the increase in a particular direction.
“I think there is nothing much to do other than working on the rate of increase which must be in a particular direction. What would be the government’s policy so that the consumers will benefit from it?, what would be the government’s policy with regards to the responsibility of the operators and what should be the responsibility of the consumers?,” he asked.
Speaking further on if due process was followed before the increment of the electricity tariff, the Power Expert said that “the issue of due process is more of consultation.
“The increment has been established by the law since the prorogation of the ESPRA act in 2005. The ESPRA act boarders on the multi-year tariff order that regulates the pricing in the electricity tariff.
“It was put in place to ensure that the investors or the DISCOs were able to make back their investment.
“The basis was that there couldn’t have been a step change from cost reflective tariff that we were trying to move to at that time,” he explained.
The Federal High Court sitting in Lagos has warned the Federal Government and the Distribution Companies (DISCOs) not to disobey subsisting court orders on electricity tariff.
The court also warned the government not to act in a way that showed disdain for the court in a constitutional democracy.
Presiding Justice, Mohammed Idris, gave the warning while ruling in a suit filed by a lawyer and rights activist, Toluwani Adebiyi, over the recent hike in electricity tariff on Monday.
Justice Idris fixed Friday, February 19 to hear an application by the Nigerian Electricity Regulatory Commission (NERC) seeking a stay of proceedings in the suit.
The judge fixed the date after listening to the arguments of lawyers representing parties in the matter over the order in which pending applications should be taken by the court.
Mr Adebiyi filed a suit seeking a perpetual injunction restraining NERC from implementing any upward review of electricity tariff without significant improvement in power supply for at least 18 hours a day in May 2015.
He also wants an order restraining NERC from foisting compulsory service charges on pre-paid meters until “the meters were designed to read charges per second of consumption and not a flat rate of service not rendered or power not used.”
Multiple Long-term Financing Approach
Mr Adebiyi wants the service charge on pre-paid meters not to be enforced until there is visible efficient and reliable power supply like those of foreign countries where the idea of service charge was borrowed.
He further asked for an order of court mandating the NERC to do the needful and generate more power to meet the electricity use of Nigerians, emphasising that the needful should include and not limited to a multiple long-term financing approach, sourced from the banks, capital market, insurance and other sectors of finance to power the sector.
The lawyer also asked the court to mandate the NERC to make available to all Nigerians within a reasonable time of maximum of two years, prepaid meters as a way to stop the throat-cutting indiscriminate estimated bill which must be devoid of the arbitrary service charge, but only chargeable on power consumed.
In an affidavit in support of the suit personally deposed to by the applicant, the lawyer lamented that despite the motto and mission of NERC which were expressly stated as “keeping the lights on and to meet the needs of Nigeria for safe, adequate, reliable and affordable electricity,” most communities in Nigeria do not get more than 30 minutes of electricity supply, while the remaining 23 hours and 30 minutes were always without light and in total darkness.
“Nigeria’s poor masses are paying an estimated and indiscriminate residential bill ranging from 5, 000 Naira to 18, 000 Naira, spending an average of 15, 000 Naira to 20, 000 Naira for fuel to maintain generating set.
“Businesses had collapsed, industries had closed down, and residents cannot sleep comfortably at night due to inefficiency of our power industry.
“Companies and commercial houses are groaning under throat-cutting power bill which they are paying for, yet not getting the benefit for such payment,” Adebiyi stated.
Poor Power Supply
He stressed that the proposed increase in electricity tariff came amidst the tangled web of poor power supply with no reasonable proof of improvement.
“The situation is self evident, it readily speaks for itself because everyone is suffering from poor power outrage.
“Bringing further increase amidst this tangled web of hardship and without any improvement in power supply will be highly unjustifiable and will be an economic burden on Nigeria populace. It is totally absurd and not for the good of the people and therefore must be stopped,” Adebiyi submitted.
Justice Idris had made an order directing parties to maintain status quo and for NERC to suspend all actions relating to any increment in electricity tariff pending the hearing and final determination of the suit.
But while the suit was pending, NERC in conjunction with the Electricity Distribution Companies commenced the implementation of the new electricity tariff on February 1.
Protests by labour unions had since trailed the new power tariff.
At the proceedings, the plaintiff drew the court’s attention to an application seeking to commit the NERC’s Chairman and the CEOs of the Distribution Companies (Discos) to prison for allegedly flouting the order.
But NERC’s lawyer, Chief Anthony Idigbe (SAN), said he had filed an appeal against the order by Justice Idris.
He also said he had a pending application for a stay of the proceedings pending the determination of the appeal.
Mr Idigbe mentioned that the plaintiff had not effected service of the contempt proceedings on the alleged contemnors.
The two lawyers were divided on which application should be heard first.
Mr Adebiyi said the contempt charge should be heard first since NERC had undermined the court’s authority, but Mr Idigbe said the application for stay of proceedings should take precedence since an appeal had been lodged.
In a short ruling on the issue, Justice Idris, held that it was 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 plaintiff then asked for a short adjournment to enable him file his response to the application.
Justice Idris subsequently adjourned till Friday for the hearing of the application for a stay of proceedings.
A Nigerian Energy Consultant has expressed displeasure with the increase in electricity tariff by the Distribution Companies (DISCOs).
Speaking on Channels Television’s Sunrise Daily on Tuesday, Dr. Yemi Oke likened the increment in electricity tariff to advanced fee fraud.
“I identify with the masses because their agitations are genuine.
“But what I don’t understand about the DISCOs is that, what is the position of the increment under the law?.
“The law says you meter before increasing tariff, but they haven’t done the metering,” he said.
The energy consultant further noted that there were three institutions under the power sector reforms 2005 – the NRC, Rural Identification Fund/ Agency and Power Consumers’ Assistance Fund (PCAF).
“The PCAF should be factored in, at any time there is an increase or adjustment in tariff.
“Nobody is talking about that. The fund hasn’t been set up. It is under part eight of the law from section 83-87.
“The DISCOs must make extensive consultation with the stakeholders, different categories of consumers before increasing the tariff,” he emphasised.
Dr. Oke, however, supported the mild nationwide protest carried out by the Nigerian Labour Congress (NLC) on Monday, saying that “labour is fighting because of the tariff, but there are different categories of consumers. It is not the intention of labour to fight for the commercial consumers (companies), but those who consume a bit of the megawatt”.
Providing solutions to the hike in electricity tariff, Dr. Oke said that “there is needless competition and tension for the insufficient megawatt that is being generated and distributed from the DISCOs.
“We need to focus on increasing the production, focus on centralised governance structure that makes the NRC the only company that regulates and gives license and labour should also engage the stakeholders as to what is provided in the law”.
The Minister of Power, Works and Housing, Mr Babatunde Fashola, says the new electrify tariff is the first major decision that will attract needed investment in the sector.
Fashola’s comment in Lagos on Monday came just as the Nigeria Labour Congress the Trade Union Congress and their allies held nationwide protest against the tariff hike of 45 per cent.
“The question on the lips of everybody is; why can’t we have power first before we pay?
“I wish we could do that, but if they understood that power business is funded from finance from banks. So, no bank is going to lend money to you if you can’t show a recovery price.
“That is the reason we can’t have power first before tariff. It has to be produced before we have it and it has to be paid for.
“The supplier of gas is not going to supply unless he sees his cash,” the Minister explained.
On the protest by the unions, Mr Fashola urged them not to start a new fight, saying “we don’t need one”.
“In any event, there are part of the employee of all these DISCOs and GENCOs that are still working, so let’s get to productivity. Let’s stop fighting (and) let’s produce.”
On the level of electricity supply which the unions are insisting must improve before a new tariff is issued, the Minister said that the capacity Nigeria had in January had never been reached before.
“In the last week of January, we recorded all time high generation of 5,000mw. Nigeria has never reached that level of generation (and) we need a lot more.
“But even with that 5,000mw, there is a lot of service work that needs to go on so that people can access the power.
“So not paying for power, you are disrupting the system; diverting lines, you are disrupting the system; vandalising pipes, you are disrupting the system, you are cheating the system, it is part of anti-corruption (and) everybody must pay for what he uses.
After a meeting with operators in the power sector, the Minister also inspected a transmission facility under construction.
He urged the contractor to expedite action so that incremental supply could be experienced.
The Vice President of the Nigerian Labour Congress (NLC) has expressed dissatisfaction in the increase in electricity tariff rate by the Distribution Companies (DISCOs).
On Channels Television’s Sunrise Daily on Monday, Mr Asugbuni Amaechi said “the NLC through its supreme organ will today (Monday), Pickett the DISCOs as regards the outrageous increase in tariff. We are doing that nationwide.
“We regard it as illegal, an increase that didn’t bear in mind, the stakeholders involved, that didn’t consider Nigerians and we believe that there was no consultation to this effect.
“The increase itself, is unacceptable because it affects majority of Nigerians – we can’t talk about increasing the tariff when there is no availability of power,” he stressed.
The Vice President of the NLC further gave reasons for the nationwide protest.
“We proceeded with this action because they wanted to know what the NLC would do.
“This is a mild approach because we have shut down the nation as a response to this ungodly policy.
“We believe that by picketing the DISCOs, there should be a reverse to that action before the end of today (Monday), otherwise, we may have to take some other drastic steps.
“This protest is to ensure that we occupy their premises with the intention of giving them the serious message on behalf of Nigerians that they cannot go ahead with the decision to increase the tariff because whatever we are doing today, as we speak, is to implement integrity”, he maintained.
Robust Metering Plan
In response to the NLC’s demands, the Director of Eko DISCO, George Etomi, who was also a guest on Sunrise Daily, said that the increase in tariff was a function of the entire electricity chain.
“It is not just the DISCOs, it is a chain that started with gas, generation, transmission and distribution. The entire system is in liquid – so, it is not a bankable proposition,” he explained.
Mr Etomi further said: “I don’t think anyone would argue the fact that metering is out of this business.
“We have argued several times that the priority should be for everyone to be metered.
“But when you want to do a robust metering plan, it must be a plan that works for everybody.
“Let’s not forget that this industry has been in existence close to 100 years, and if everybody could not be metered in 100 years, I don’t know why in 18 months, they expect metering to happen”.
Smart Metering Platform
The Eko DISCOs’ boss said that the type of meters were important in determining the tariff.
“When we came on board, we met the Credited Advanced Metering Implementation Programme by which, consumers were supposed to pay for their meters which is deducted over a period of time.
“Most of these meters are pre-paid. They are completely unreliable – there is really no need to continue with the pre-paid meters.
“We decided to move onto the Smart Metering Platform which would eliminate, almost completely, issues to do with the amount you consume,” he added.
Mr Oke, while stating that tariff must be seen as “paying for the power consumed”, explained that “Tariff is purely a legal issue because it is regulated (and this) is far different from a policy issue.”
Mr Oke acknowledged the progress made so far by the Ministry of Power, adding that the Minister has hit the ground running in terms of having a clear understanding of the problems in the sector.
According to the energy expert, what Mr Fashola said borders on the tariff methodology.
“Tariff methodology simply means the basis for agreeing what is to be charged to consumers.
“The principle says that you must encourage DISCOs to charge enough tariff to be able to equip their investment with reasonable yield.
“It also says that the methodology should aim at facing off any form of production subsidy,” he said.
Mr Oke also gave his recommendation on the development of an effective tariff system.
“The tariff structure we have now is not likely going to work because it targets production. That is why some of us will prefer a kind of feeding tariff structure that targets consumption,” he said.
“We have to start reworking the tariff methodology to reflect actual consumption as against production.
“We need to accelerate the rate of metering which is easier to get people to pay actual values for power.
“But to jack up tariffs on estimated billings without supplying power to Nigerians will be problematic (and this) is a recipe for crisis.”
The Minister of Power, Works and Housing, Mr Babatunde Fashola had recently said that a tariff system which allows consumers of electricity to pay for only what they consume is a sure way to having stable electricity supply in Nigeria.
At a media conference in Abuja where he informed the media about his blueprints for handling issues in the three ministries he oversees, he emphasized his determination to implement an effective market tariff system for the power sector.