Hike In Electricity Tariff, Issues And Challenges

Biz MorningThe Nigerian Electricity Regulatory Commission has assured Nigerians that better days are just around the corner as all hands are on deck to improve power supply in the country.

Chairman and Chief Executive Officer of the Nigerian Electricity Regulatory Commission, NERC, Dr Sam Amadi, gave the assurance on Business Morning on Friday, where he defended the implementation of a new electricity tariff in the multi-year tariff order (MYTO).

Meanwhile, an entrepreneur, Mr Christian Tom-West and a consultant in the power sector, Mr Daniel Mueller, argued that they cannot be paying more when they are not getting value for their money.

They urged the regulator to make these charges affordable for consumers and ensure that they get value for their money.

Power Sector Owners Yet To Invest For Better Performance – Barth Nnaji

Barth NnajiA former Minister of Power, Barth Nnaji, on Wednesday called on investors in Nigeria’s power sector to start investing, to improve the quality of service and deliver better power supply to the citizens as that was the reason the government sold the infrastructure to them.

According to Mr Nnaji, one of the keynote speakers at the 7th Lagos Economic Summit (EHINGBETI 2014) said the new owners “invested to purchase but they haven’t invested to improve.” He said this while appearing on Channels Television’s breakfast programme, Sunrise Daily.

Mr Nnaji mentioned that rapid investment is one key issue and the companies that purchased the distribution and generation companies must invest quickly because “that’s the whole essence of the privatization.”

He added that the privatization process would be meaningless unless those companies actually deliver on what they signed on to, which is, “they must invest to improve efficiency of collection and the network for distribution companies. Those who purchased generation companies must invest to lift the generation figures. ”

The Federal Government had assured Nigerians that the reforms made in the power sector would put an end to epileptic power supply experienced in many parts of the country but many still complain of poor service.

On this Nnaji said the performance growth in the sector should have been incremental and that the investors would need to replace a lot of dilapidated transformers, lines as well as install connection systems, prepaid meters to satisfy the demand for electricity.

He said, the time it would take citizens to feel the impact of the privatization process would vary depending on the area, noting that it would take about a year for those in Lagos to feel the changes.

He disclosed that there were generating plants in Lagos which only require gas to deliver power as quickly as possible. He mentioned that vandalism was playing a huge role on the unavailability of gas and that the infrastructure needs more investment and monitoring systems to ensure better delivery.

When asked about the possibilities of hydro power, Nnaji said “Hydro has a limit. After Mambilla and Zungaru (power plants), there’s really no other big hydro that we are working on so we have to understand that as a country.

Nnaji, who said that the success of Nigeria’s power sector would have to come from gas fired plants and coal fired plants, noted that there were large deposits of coal in Enugu, Benue, Kogi and Gombe States.

He mentioned that the large economies of the world including America and China were using coal-fired plants to generate up to 60 percent of their power despite the negative implications to the environment.

“So people can’t tell Nigeria, you should be very clean and be tree-huggers here, while they are powering their economy with coal. It’s just unacceptable. I think (in) Nigeria, we have to willfully go about this and invest in coal-fired plants.”

He defended his position on Nigeria using coal despite the implications to environmental health, stating that the coal quality in Nigeria is better that in many other countries. The coal has no sulfur and has high calorific value and so not “great pollutants” to the environment.

Nigerians Can Now Sue Power Sector Investors – Lawyer

A legal Practitioner, Emmanuel Umoren, on Friday warned the new private investors and owners of Nigeria’s power sector of breaching their contract with the people, insisting that consumers now have the power to sue them to court.

“Every transaction is a contract and if there’s any breach whatsoever they can be sued,” he said.

Mr Umoren who was a guest on Sunrise Daily, commended the government’s decision to privatise the power sector, making it a business which is liable to be sued if consumers discover a breach in the contract.

“It is business now. It’s no more government money. Let these DISCOs know that (now) we can take them to court. That’s a very important part. We can now take them to court because they are business men,” he said.

He highlighted some circumstances in which consumers can sue the power companies, including power surge (which leads to damages). On cases of in availability of electricity, Umoren said “it is going to be very difficult to sue them for not providing you light,” but added that the position may change as time goes on and with the intellectual improvement in the judiciary system.

On complains of power shortage in some areas, Umoren said “my major problem is that we do not think these things through because you are creating monopolies in areas.” He explained that the issue of metering lies with the distribution companies (DISCOs) and added that efforts are being made by investors to check cases of power theft by citizens as such usages are unaccounted for.

He however complained about the unavailability of options for end users leading to monopoly which does not benefit Nigerians. He said there should be options in case consumers are not satisfied with the services of a certain distribution company and added that consumers should be able to switch to any DISCO of choice as such is obtainable in other climes.

On the increase in service charge(s) raised twice within the last year, Umoren questioned the activities of the new investors. “How did we arrive at the first price, if you did not do a thorough analysis of doing the business?” he asked.

On nationwide complains regarding fixed service charge of N750 which may be increased as well as payment of meter maintenance without getting the required maintenance services, Umoren warned the private investors that they are liable to court charges by citizens.

He also faulted the dominance of political cases at the Supreme Court which does not allow for the prominence of other issues, including business, which affect the citizens.

“The decisions that come from the Supreme Court and Appeal Court(s) are mostly political issues because they (politicians) have the money,” Umoren said.