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We’re bleeding under energy theft –DisCos

We’re bleeding under energy theft –DisCos

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Nigeria’s 11 Electricity Distribution Companies (DisCos) have raised the alarm for the Federal Government and all concerned stakeholders to urgently intervene to save them from sudden death that may arise from the nationwide menace of energy theft.

The Association of Nigerian Electricity Distributors (ANED), an umbrella body of the DisCos had in 2018; called for stiffer legislative actions against energy theft and meter bypassing conducted by fraudulent consumers on their network to reduce market shortfall.

According to the body, over 40 per cent of their revenue is lost monthly basis to the menace which continue to aggravate their financial woes in the power sector value chain.

In a recent interview, the Executive Director, Research and Advocacy of ANED, Mr Sunday Oduntan, urged all stakeholders including government and regulatory agencies to collaborate to solve the crises in the power sector rather than the current buck-passing practice being witnessed among sector players.

He equally spoke on what the incoming Minister of Power should focus on in order to have a power sector that Nigerians would be proud of.

Excerpts:

Concerns over 97 power grid collapses since its privatisation

The transmission grid needs to be strengthened in addition to putting more investment to improve the grid. That has always been there as part of the challenges of the market.

A lot of the equipment have been dilapidated and need to be replaced . However, it is imperative to mention that the current government is trying its best to invest more in TCN. Issues that have to do with system collapse are those that border simply on weak transmission grid. Those who blamed Discos for the collapse are mischievous even as we don’t want to join issue with anybody. All we are saying is that whether you are talking about generation, transmission or distribution, we need to improve and strengthen them along the value chain. It is more about looking at the value chain as a whole and doing something to improve all.

Resolving energy theft

The first thing we want to do is to encourage other states to copy the good work of the Edo and Ekiti  state Houses of Assembly that have been able to pass energy theft law which seeks to criminalise energy theft.

Of course, in the law of the federation we have law against energy theft as well.

We encouraged every states to take a cue from that and not to politicise issue of energy theft which is bleeding the power sector profusely and as  far as our staff are concerned, if anybody knows of any power distribution companies staff engaging in any infraction they should report to the appropriate quarters. That is why power distribution companies have whistleblowers.

I am imploring the media to help us expose those infractions while we promise to do everything possible to flush out bad eggs in our fold .

I think all of us owe the country a duty to come together and fight the menace of energy theft because its hurting our economy and investments.

Second term focus

I think the second term focus of the Buhari administration this time around should be on the alignment of the value chain.  By alignment I mean there should be deliberate effort to ensure that the value chain is aligned by ensuring that whatever is generated  must be transmitted and distributed through the grid.

There are two types of alignments-commercial and technical. By technical alignment, I mean if you are generating 10,000 Mw you must be able to have a transmission grid that would take on the distribution network to distribute it.

Commercial alignment means that you must be able to have the appropriate pricing of the product using other indices like foreign exchange, lending rate, inflation rate and with a view to making the sector commercially viable.

What has been wrong with the sector all along is liquidity crisis. As far as the government is concerned, I believe they have done their best in the last four years but they still need to do more in the next four years.

Disagreement over eligible customers

As far as ANED and the Discos are concerned, we didn’t have problem with the power generating companies. What we are saying is that anything we are going to do in the power sector must be done in accordance with the law and due process.

The law allows the Minister to declare eligible customers. The same law is very clear at what point the determination will take place.

So, the issue then had to do with when it was done and not whether it can be done.

Yes, it can be done, but it should be done at a time when the sector is matured beyond where it is now. We believe in cooperating with the Federal Government, because we are not out to blame anybody.

We are saying that we all need to work together. Let us collaborate and cooperate to ensure that we improve the power sector.

We are not in disagreement with anybody; we are not against the power generating companies, Transmission Company of Nigeria or the Federal Government.

Discos recapitalisation

The references to recapitalisation are misleading and unrealistic without taking into consideration the ability to recover the capital injection.

In the absence of appropriate pricing of the product, you can’t recapitalise because any capital you put, there must be cost recovery.

When you are underselling the product, how do you recover your cost? So, it is more of a misleading, unrealistic and mischievous narration by the Transmission Company of Nigeria boss.

He knows that what he said was not true, he  knows he was just engaging in propaganda. Let us come out and tell Nigerians the truth.

Proposed electricity distribution and franchising regulation

As far as we are concerned, Nigeria Electricity Regulation Commission (NERC)is a respected regulator. It has the right to regulate so it is their job to make regulation.

Assessment of Meter Asset Provider (MAP)

MAP is a good idea, we are just in the early stage of implementation and we are hoping that it would be implemented in a way that it would serve the industry well.

We are in support of the initiatives that can provide meters to more electricity customers in the country. We have to estimate in the absence of meters, but that does not mean we are happy with the estimated billing regime.

We would be happier to give out more meters. When there are more meters installed, there would be revenue assurance for the power companies.

There is more prospects for MAP, whatever shortcomings that may arise I have no doubt same would be corrected and efforts would be made to ensure that it is put in proper perspective for increased value addition in the power sector.

ANED, Fashola misunderstanding

Let me correct an impression, Mr Babatunde Fashola is my brother. His mother is from Abeokuta; his late father was from Lagos.

He was the former governor of Lagos state. I have no personal problem with him at all.

It’s not Fashola versus Oduntan crisis, it is very unfortunate that media descended to the level of making it a big squabble between me and the former Minister.

I believe that he meant well just like I do too. As far as we are concerned, anybody who leads the power ministry should do everything possible to add value to the sector in the interest of the country.

ANED  is interested in us and everybody in the sector, putting the sector first. I would say that Mr.Fashola tried his best, we had areas of disagreements, but largely, we agreed on most things. Mr. Fashola also agreed that the product is not appropriately priced. He also knows and agreed that the Discos are being forced to undersell their products.

Mr. Fashola also agreed that there was need for alignment in the sector. Whether he has the political will to practicalise it or not, I think we should leave all that for posterity.

He may still be the next power minister,  and I have no doubt that Mr. Fashola tried his utmost best and I believe that he left the place better than he met it. That is what is most important. People should not make it look like two personalities fighting. We are all Nigerians striving to make the sector better than we found it.

I believe whoever will come in as the next Minister of Power must face reality that there is an urgent need for commercial and technical alignment of the value chain in the Nigeria’s power sector and anything short of that will fail.

 

 

 

THE SUN

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